Document:

exv4w3

Exhibit 4.3

FORM OF SERIES B 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 B Warrant To Purchase Common Stock

Series B Warrant No.: B -               

Date of Issuance: March 11, 2010 (“Issuance 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, [HUDSON BAY
FUND, LP][HUDSON BAY OVERSEAS FUND, LTD.][OTHER BUYERS], 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
earlier of (x) the six month anniversary of the Issuance Date and (y) the Stockholder Approval Date
(as defined in the Securities Purchase Agreement (as defined below)) (the “Initial Exercise Date”),
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
Section 1 of 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
(the “Securities Purchase Agreement”).

 

 

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 Exercise Date, 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
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

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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.

     (b) Exercise Price. For purposes of this Warrant, “Exercise Price” means
$1.14, 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), if at the time of exercise hereof a Registration Statement (as
defined in the Registration Rights Agreement (as defined in the Securities Purchase Agreement)) is
not effective (or the prospectus contained therein is not available for use) for the resale by the
Holder of all of the Warrant Shares, then 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

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instead to receive upon such exercise the “Net Number” of shares of Common Stock determined
according to the following formula (a “Cashless Exercise”):

	 	 	 	 	 
	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

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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 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

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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
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

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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
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) Adjustment Upon Issuance of Shares of Common Stock. If and whenever on or after
the date of the Securities Purchase Agreement, the Company issues or sells, or in accordance with
this Section 2 is deemed to have issued or sold, any shares of Common Stock (including the issuance
or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding
any Excluded Securities (as defined in the Securities Purchase Agreement) issued or sold or deemed
to have been issued or sold) for a consideration per share (the “New Issuance Price”) less than a
price equal to the Exercise Price in effect immediately prior to such issue or sale or deemed
issuance or sale (such Exercise Price then in effect is referred to as the “Applicable Price”) (the
foregoing a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the Exercise Price
then in effect shall be reduced to an amount equal to the New Issuance Price. For purposes of
determining the adjusted Exercise Price under this Section 2(b), the following shall be applicable:

     (i) Issuance of Options. If the Company in any manner grants or sells any
Options and the lowest price per share for which one share of Common Stock is issuable upon
the exercise of any such Option or upon conversion, exercise or exchange of any Convertible
Securities issuable upon exercise of any such Option is less than the Applicable Price, then
such share of Common Stock shall be deemed to be outstanding and to have been issued and
sold by the Company at the time of the granting or sale of such Option for such price per
share. For purposes of this Section 2(b)(i), the “lowest price per share for which one share
of Common Stock is issuable upon the exercise of any such Options or upon conversion,
exercise or exchange of any Convertible Securities issuable upon exercise of any such
Option” shall be equal to the sum of the lowest amounts of consideration (if any) received
or receivable by the Company with respect to any one share of Common Stock upon the granting
or sale of the Option, upon exercise of the Option and upon conversion, exercise or exchange
of any Convertible Security issuable upon exercise of such Option. Except as contemplated
below, no further adjustment of the Exercise Price shall be made upon the actual issuance of
such shares of Common Stock or of such Convertible Securities upon the exercise of such
Options or upon the actual issuance of such shares of Common Stock upon conversion, exercise
or exchange of such Convertible Securities. For clarification purposes and without limiting
the foregoing, in calculating the “lowest price per share for which one share of Common
Stock is issuable upon the exercise of any such Options or upon conversion, exercise or
exchange of any Convertible Securities issuable upon exercise of any such Option” paid or
payable to the Company pursuant to this Section 2(b), any amounts paid or payable to the
holder (or any other Person) upon such conversion, exercise or exchange of such Option shall
reduce the value of the consideration paid or payable to the Company in such conversion,
exercise or exchange and/or, as the case may be, the value of any other consideration or
benefit conferred.

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     (ii) Issuance of Convertible Securities. If the Company in any manner issues or
sells any Convertible Securities and the lowest price per share for which one share of Common
Stock is issuable upon the conversion, exercise or exchange thereof is less than the
Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to
have been issued and sold by the Company at the time of the issuance or sale of such
Convertible Securities for such price per share. For the purposes of this Section 2(b)(ii),
the “lowest price per share for which one share of Common Stock is issuable upon the
conversion, exercise or exchange thereof” shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to one share of
Common Stock upon the issuance or sale of the Convertible Security and upon conversion,
exercise or exchange of such Convertible Security. Except as contemplated below, no further
adjustment of the Exercise Price shall be made upon the actual issuance of such shares of
Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any
such issue or sale of such Convertible Securities is made upon exercise of any Options for
which adjustment of this Warrant has been or is to be made pursuant to other provisions of
this Section 2(b), except as contemplated below, no further adjustment of the Exercise Price
shall be made by reason of such issue or sale. For clarification purposes and without
limiting the foregoing, in calculating the “lowest price per share for which one share of
Common Stock is issuable upon the conversion, exercise or exchange thereof” paid or payable
to the Company pursuant to this Section 2(b), any amounts paid or payable to the holder (or
any other Person) upon conversion or exercise (as applicable) of such Convertible Security
shall reduce the value of the consideration paid or payable to the Company in such
conversion, exercise or exchange and/or, as the case may be, the value of any other
consideration or benefit conferred.

     (iii) Change in Option Price or Rate of Conversion. If the purchase or exercise
price provided for in any Options, the additional consideration, if any, payable upon the
issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which
any Convertible Securities are convertible into or exercisable or exchangeable for shares of
Common Stock increases or decreases at any time, the Exercise Price in effect at the time of
such increase or decrease shall be adjusted to the Exercise Price which would have been in
effect at such time had such Options or Convertible Securities provided for such increased or
decreased purchase price, additional consideration or increased or decreased conversion rate,
as the case may be, at the time initially granted, issued or sold. For purposes of this
Section 2(b)(iii), if the terms of any Option or Convertible Security that was outstanding as
of the date of issuance of this Warrant are increased or decreased in the manner described in
the immediately preceding sentence, then such Option or Convertible Security and the shares
of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed
to have been issued as of the date of such increase or decrease. No adjustment pursuant to
this Section 2(b) shall be made if such adjustment would result in an increase of the
Exercise Price then in effect.

     (iv) Calculation of Consideration Received. If any Option or Convertible
Security is issued in connection with the issuance or sale or deemed issuance or sale of any
other securities of the Company, together comprising one integrated transaction, (x) such
Option or Convertible Security (as applicable) will be deemed to have been issued

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for consideration equal to the Black Scholes Consideration Value thereof and (y) the
other securities issued or sold or deemed to have been issued or sold in such integrated
transaction shall be deemed to have been issued for consideration equal to the difference of
(I) the aggregate consideration received by the Company minus (II) the Black Scholes
Consideration Value of each such Option or Convertible Security (as applicable). If any
shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to
have been issued or sold for cash, the consideration received therefor will be deemed to be
the gross amount of consideration received by the Company therefor. If any shares of Common
Stock, Options or Convertible Securities are issued or sold for a consideration other than
cash, the amount of such consideration received by the Company will be the fair value of such
consideration, except where such consideration consists of publicly traded securities, in
which case the amount of consideration received by the Company for such securities will be
the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days
immediately preceding the date of receipt. If any shares of Common Stock, Options or
Convertible Securities are issued to the owners of the non-surviving entity in connection
with any merger in which the Company is the surviving entity, the amount of consideration
therefor will be deemed to be the fair value of such portion of the net assets and business
of the non-surviving entity as is attributable to such shares of Common Stock, Options or
Convertible Securities, as the case may be. The fair value of any consideration other than
cash or publicly traded securities will be determined jointly by the Company and the Holder.
If such parties are unable to reach agreement within ten (10) days after the occurrence of an
event requiring valuation (the “Valuation Event”), the fair value of such consideration will
be determined within five (5) Trading Days after the tenth (10th) day following
such Valuation Event by an independent, reputable appraiser jointly selected by the Company
and the Holder. The determination of such appraiser shall be final and binding upon all
parties absent manifest error and the fees and expenses of such appraiser shall be borne by
the Company.

     (v) Record Date. If the Company takes a record of the holders of shares of
Common Stock for the purpose of entitling them (A) to receive a dividend or other
distribution payable in shares of Common Stock, Options or in Convertible Securities or (B)
to subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then
such record date will be deemed to be the date of the issue or sale of the shares of Common
Stock deemed to have been issued or sold upon the declaration of such dividend or the making
of such other distribution or the date of the granting of such right of subscription or
purchase (as the case may be).

     (c) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price
pursuant to paragraphs (a), (b) or (d) 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).

     (d) Holder’s Right of Alternative Exercise Price Following Issuance of Convertible
Securities. Subject to Section 4(n) of the Securities Purchase Agreement, in addition to and
not

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in limitation of the other provisions of this Section 2, if the Company in any manner issues
or sells any Options or Convertible Securities (any such securities, “Variable Price Securities”)
after the Subscription Date that are convertible into or exchangeable or exercisable for shares of
Common Stock at a price which varies or may vary with the market price of the Common Shares,
including by way of one or more reset(s) to a fixed price, but exclusive of such formulations
reflecting customary anti-dilution provisions (such as share splits, share combinations, share
dividends and similar transactions) (each of the formulations for such variable price being herein
referred to as, the “Variable Price”), the Company shall provide written notice thereof via
facsimile and overnight courier to the Holder on the date of issuance of such Convertible
Securities or Options. Subject to Section 4(n) of the Securities Purchase Agreement, from and
after the date the Company issues any such Convertible Securities or Options with a Variable Price,
the Holder shall have the right, but not the obligation, in its sole discretion to substitute the
Variable Price for the Exercise Price upon Exercise of this Warrant by it by designating in the
Exercise Notice delivered upon any Exercise of this Warrant that solely for purposes of such
Exercise the Holder is relying on the Variable Price rather than the Exercise Price then in effect.
The Holder’s election to rely on a Variable Price for a particular Exercise of this Warrant shall
not obligate the Holder to rely on a Variable Price for any future Exercises of this Warrant.

     (e) Other Events. In the event that the Company (or any Subsidiary thereof) shall take
any action to which the provisions hereof are not strictly applicable, or, if applicable, would not
operate to protect the Holder from dilution or if any event occurs of the type contemplated by the
provisions of this Section 2 but not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom stock rights or other rights with
equity features), then the Company’s board of directors shall in good faith determine and implement
an appropriate adjustment in the Exercise Price and the number of Warrant Shares (if applicable) so
as to protect the rights of the Holder, provided that no such adjustment pursuant to this Section
2(d) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise
determined pursuant to this Section 2, provided further that if the Holder does not accept such
adjustments as appropriately protecting its interests hereunder against such dilution, then the
Company’s board of directors and the Holder shall agree, in good faith, upon an independent
investment bank of nationally recognized standing to make such appropriate adjustments, whose
determination shall be final and binding and whose fees and expenses shall be borne by the Company.

     (f) 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

10

 

rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time
after the issuance of this Warrant, then, in each such case, 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.

     (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 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

11

 

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 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) Black Scholes Value. Notwithstanding the foregoing and the provisions of Section
4(b) above, in the event of a Change of Control (including, without limitation, a Change of Control
that occurs prior to the Initial Exercise Date), if the Holder has not exercised this Warrant in
full prior to the consummation of such Change of Control, at the request of the Holder delivered
before the ninetieth (90th) day after the consummation of such Change of Control, the
Company or the Successor Entity (as the case may be) shall purchase this Warrant from the Holder on
the date of such request by paying to the Holder cash in an amount equal to

12

 

the Black Scholes Value of the unexercised portion of this Warrant that remained on the date
of the consummation of such Change of Control.

     (d) 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 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.

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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.

     (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, as indicated on the face of such new Warrant which is the same as the
Issuance Date, 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

14

 

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 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

15

 

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.

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

16

 

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) “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.

     (b) “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).

17

 

     (c) “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 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.

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

     (e) “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.

     (f) “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(b)(iv) 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.

     (g) “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

18

 

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, 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.

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

     (i) “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.

     (j) “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.

     (k) “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 (which, solely for clarification
purposes, includes all Common Shares and all shares of Common Stock issuable upon exercise of the
Series A Warrants (as defined in the Securities Purchase Agreement) (without regard for any
limitations on exercise set forth therein) in accordance with the terms of the Registration Rights
Agreement).

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

     (m) “Equity Conditions” means: (i) on each day during the period beginning one month prior to
the applicable date of determination and ending on and including the applicable date of
determination either (x) one or more Registration Statements filed pursuant to the Registration
Rights Agreement shall be effective and the prospectus contained therein shall be available for the
resale by the Holder of all of the Registrable Securities in accordance with the terms of the
Registration Rights Agreement and there shall not have been during such period any Grace Periods
(as defined in the Registration Rights Agreement) or (y) all Registrable Securities shall be
eligible for sale without restriction under Rule 144 (as defined in the Securities Purchase

19

 

Agreement) (including, without limitation, volume restrictions) and without the need for
current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) and
without the need for registration under any applicable federal or state securities laws (in each
case, disregarding any limitation on exercise of the SPA Warrants); (ii) on each day during the
period beginning three months prior to the applicable date of determination and ending on and
including the applicable date of determination (the “Equity Conditions Measuring Period”), the
Common Stock (including all Registrable Securities) is listed or designated for quotation (as
applicable) on an Eligible Market and shall not have been suspended from trading on an Eligible
Market (other than suspensions of not more than two (2) days and occurring prior to the applicable
date of determination due to business announcements by the Company) nor shall delisting or
suspension by an Eligible Market have been threatened (with a reasonable prospect of delisting
occurring) or pending either (A) in writing by such Eligible Market or (B) by falling below the
minimum listing maintenance requirements of the Eligible Market on which the Common Stock is then
listed or designated for quotation (as applicable); (iii) on each day during the Equity Conditions
Measuring Period, the Company shall have delivered all shares of Common Stock issuable upon
exercise of the SPA Warrants on a timely basis as set forth in Section 1(a) hereof and all other
shares of capital stock required to be delivered by the Company on a timely basis as set forth in
the other Transaction Documents; (iv) any shares of Common Stock to be issued in connection with
the event requiring determination may be issued in full without violating Section 1(f) hereof; (v)
any shares of Common Stock to be issued in connection with the event requiring determination may be
issued in full without violating the rules or regulations of the Eligible Market on which the
Common Stock is then listed or designated for quotation (as applicable); (vi) on each day during
the Equity Conditions Measuring Period, no public announcement of a pending, proposed or intended
Fundamental Transaction shall have occurred which has not been abandoned, terminated or
consummated; (vii) the Company shall have no knowledge of any fact that would reasonably be
expected to cause (1) any Registration Statement filed pursuant to the Registration Rights
Agreement to not be effective or the prospectus contained therein to not be available for the
resale of all of the Registrable Securities in accordance with the terms of the Registration Rights
Agreement or (2) any Registrable Securities to not be eligible for sale without restriction
pursuant to Rule 144 (including, without limitation, volume restrictions) and without the need for
current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or any
applicable state securities laws (in each case, disregarding any limitation on exercise of the SPA
Warrants); (viii) the Holder shall not be in (and no other Buyer shall be in) possession of any
material, non-public information provided to any of them by the Company, any of its affiliates or
any of their respective employees, officers, representatives, agents or the like; and (ix) on each
day during the Equity Conditions Measuring Period, the Company otherwise shall have been in
compliance with each, and shall not have breached any material provision, covenant, representation
or warranty of any Transaction Document.

     (n) “Equity Conditions Failure” means that on any day during the period commencing ten (10)
Trading Days prior to the Mandatory Exercise Notice Date through the Mandatory Exercise Date, the
Equity Conditions have not been satisfied (or waived in writing by the Holder).

     (o) “Expiration Date” means the date that is the later of (x) the three (3) month anniversary
of the Effective Date and (y) the seven (7) month anniversary of the Closing Date

20

 

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.

     (p) “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 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.

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

     (r) “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.

     (s) “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.

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

     (u) “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.

     (v) “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

21

 

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.

     (w) “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).

     (x) “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 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.

17. MANDATORY EXERCISE. If at any time after the date the Company has initially satisfied
all of the Equity Conditions (the “Mandatory Exercise Eligibility Date”), (i) the Common Stock
trades at a price equal to or greater than $3.17 per share (as adjusted for stock
splits, stock combinations and the like occurring from and after the Issuance Date) (the “Trigger
Price”) for a period of ten (10) consecutive Trading Days following the Mandatory Exercise
Eligibility Date (the ten (10) consecutive Trading Days on which the condition in this clause (i)
is satisfied are referred to herein as the “Mandatory Exercise Measuring Period”), (ii) the average
daily dollar trading volume (as reported on Bloomberg) of the Common Stock on the applicable
Eligible Market for each Trading Day during the Mandatory Exercise Measuring Period exceeds
$200,000 per day and (iii) no Equity Conditions Failure shall have occurred, then the Company shall
have the right to require the Holder to exercise all, but not less than all, of this

22

 

Warrant for all of the then-remaining Warrant Shares in accordance with Section 1 hereof (a
“Mandatory Exercise”). The Company may exercise its right to require exercise under this Section
17 on one occasion by delivering (provided that all of the conditions set forth in clauses (i)
through (iii) above are then satisfied), on the first (1st) Trading Day immediately
following the end of the Mandatory Exercise Measuring Period, a written notice thereof by facsimile
and overnight courier to the Holder (the “Mandatory Exercise Notice” and the date the Holder
receives such notice by facsimile is referred to as the “Mandatory Exercise Notice Date”). The
Mandatory Exercise Notice shall be irrevocable. The Mandatory Exercise Notice shall (1) state the
Trading Day selected for the Mandatory Exercise in accordance with this Section 17, which Trading
Day shall be at least five (5) Trading Days but not more than fifteen (15) Trading Days following
the Mandatory Exercise Notice Date (the “Mandatory Exercise Date”), (2) state the number of shares
of Common Stock to be issued to the Holder on the Mandatory Exercise Date, (3) contain a
certification from the Chief Executive Officer of the Company that there has been no Equity
Conditions Failure and (4) contain a certification from the Chief Executive Officer of the Company
that the Company has simultaneously taken the same action with respect to all of the Series B
Warrants (as defined in the Securities Purchase Agreement). Any portion of this Warrant exercised
by the Holder after the Mandatory Exercise Notice Date shall reduce the number of Warrant Shares
for which this Warrant is required to be exercised on the Mandatory Exercise Date. If the Company
has elected a Mandatory Exercise, the mechanics of exercise set forth in Section 1 shall apply, to
the extent applicable, as if the Company had received from the Holder on the Mandatory Exercise
Date an Exercise Notice with respect to all of the then-remaining Warrant Shares. Notwithstanding
anything contained in this Section 17 to the contrary (but subject to the last sentence of this
Section 17), if (I) any shares of Common Stock trade for a price less than the Trigger Price on any
day during the period commencing on the Mandatory Exercise Notice Date and ending on the Trading
Day immediately preceding the Mandatory Exercise Date; (II) the average daily dollar trading volume
(as reported on Bloomberg) of the Common Stock on the applicable Eligible Market on any Trading Day
during the period commencing on the Mandatory Exercise Notice Date and ending on the Trading Day
immediately preceding the Mandatory Exercise Date is less than $200,000; or (III) an Equity
Conditions Failure occurs on any day during the period commencing on the Mandatory Exercise Notice
Date and ending on the Mandatory Exercise Date which has not been waived in writing by the Holder,
then, in either case, the Mandatory Exercise Notice delivered to the Holder shall be null and void
ab initio and the Mandatory Exercise shall not occur. If the Company elects to cause a Mandatory
Exercise of this Warrant pursuant to this Section 17, then it must simultaneously take the same
action with respect to all of the other Series B Warrants. Notwithstanding anything contained in
this Section 17 to the contrary, the Company may not exercise its right under this Section 17 for a
period of twenty (20) Trading Days following the Effective Date.

[signature page follows]

23

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly
executed as of the Issuance 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 B 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:exv4w4

Exhibit 4.4

FORM OF SERIES C 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 C Warrant To Purchase Common Stock

Series C Warrant No.: C -               

Date of Issuance: March ___, 2010 (“Issuance 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, [HUDSON BAY
FUND, LP][HUDSON BAY OVERSEAS FUND, LTD.][OTHER BUYERS], 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 the
earlier of (x) the six month anniversary of the Issuance Date and (y) the Stockholder Approval Date
(as defined in the Securities Purchase Agreement (as defined below)) (the “Initial Exercise Date”),
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 Section 1 of
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 (the “Securities
Purchase Agreement”).

 

 

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 Exercise Date, 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
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

2

 

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
$1.14, 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), if at the time of exercise hereof a Registration Statement (as
defined in the Registration Rights Agreement (as defined in the Securities Purchase Agreement)) is
not effective (or the prospectus contained therein is not available for use) for the resale by the
Holder of all of the Warrant Shares, then 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

3

 

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”):

	 	 	 	 	 
	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

4

 

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 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

5

 

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
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

6

 

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
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) Adjustment Upon Issuance of Shares of Common Stock. If and whenever on or after
the date of the Securities Purchase Agreement, the Company issues or sells, or in accordance with
this Section 2 is deemed to have issued or sold, any shares of Common Stock (including the issuance
or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding
any Excluded Securities (as defined in the Securities Purchase Agreement) issued or sold or deemed
to have been issued or sold) for a consideration per share (the “New Issuance Price”) less than a
price equal to the Exercise Price in effect immediately prior to such issue or sale or deemed
issuance or sale (such Exercise Price then in effect is referred to as the “Applicable Price”) (the
foregoing a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the Exercise Price
then in effect shall be reduced to an amount equal to the New Issuance Price. For purposes of
determining the adjusted Exercise Price under this Section 2(b), the following shall be applicable:

     (i) Issuance of Options. If the Company in any manner grants or sells any
Options and the lowest price per share for which one share of Common Stock is issuable upon
the exercise of any such Option or upon conversion, exercise or exchange of any Convertible
Securities issuable upon exercise of any such Option is less than the Applicable Price, then
such share of Common Stock shall be deemed to be outstanding and to have been issued and
sold by the Company at the time of the granting or sale of such Option for such price per
share. For purposes of this Section 2(b)(i), the “lowest price per share for which one share
of Common Stock is issuable upon the exercise of any such Options or upon conversion,
exercise or exchange of any Convertible Securities issuable upon exercise of any such
Option” shall be equal to the sum of the lowest amounts of consideration (if any) received
or receivable by the Company with respect to any one share of Common Stock upon the granting
or sale of the Option, upon exercise of the Option and upon conversion, exercise or exchange
of any Convertible Security issuable upon exercise of such Option. Except as contemplated
below, no further adjustment of the Exercise Price shall be made upon the actual issuance of
such shares of Common Stock or of such Convertible Securities upon the exercise of such
Options or upon the actual issuance of such shares of Common Stock upon conversion, exercise
or exchange of such Convertible Securities. For clarification purposes and without limiting
the foregoing, in calculating the “lowest price per share for which one share of Common
Stock is issuable upon the exercise of any such Options or upon conversion, exercise or
exchange of any Convertible Securities issuable upon exercise of any such Option” paid or
payable to the Company pursuant to this Section 2(b), any amounts paid or payable to the
holder (or any other Person) upon such conversion, exercise or exchange of such Option shall
reduce the value of the consideration paid or payable to the Company in such conversion,
exercise or exchange and/or, as the case may be, the value of any other consideration or
benefit conferred.

7

 

     (ii) Issuance of Convertible Securities. If the Company in any manner issues or
sells any Convertible Securities and the lowest price per share for which one share of Common
Stock is issuable upon the conversion, exercise or exchange thereof is less than the
Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to
have been issued and sold by the Company at the time of the issuance or sale of such
Convertible Securities for such price per share. For the purposes of this Section 2(b)(ii),
the “lowest price per share for which one share of Common Stock is issuable upon the
conversion, exercise or exchange thereof” shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to one share of
Common Stock upon the issuance or sale of the Convertible Security and upon conversion,
exercise or exchange of such Convertible Security. Except as contemplated below, no further
adjustment of the Exercise Price shall be made upon the actual issuance of such shares of
Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any
such issue or sale of such Convertible Securities is made upon exercise of any Options for
which adjustment of this Warrant has been or is to be made pursuant to other provisions of
this Section 2(b), except as contemplated below, no further adjustment of the Exercise Price
shall be made by reason of such issue or sale. For clarification purposes and without
limiting the foregoing, in calculating the “lowest price per share for which one share of
Common Stock is issuable upon the conversion, exercise or exchange thereof” paid or payable
to the Company pursuant to this Section 2(b), any amounts paid or payable to the holder (or
any other Person) upon conversion or exercise (as applicable) of such Convertible Security
shall reduce the value of the consideration paid or payable to the Company in such
conversion, exercise or exchange and/or, as the case may be, the value of any other
consideration or benefit conferred.

     (iii) Change in Option Price or Rate of Conversion. If the purchase or exercise
price provided for in any Options, the additional consideration, if any, payable upon the
issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which
any Convertible Securities are convertible into or exercisable or exchangeable for shares of
Common Stock increases or decreases at any time, the Exercise Price in effect at the time of
such increase or decrease shall be adjusted to the Exercise Price which would have been in
effect at such time had such Options or Convertible Securities provided for such increased or
decreased purchase price, additional consideration or increased or decreased conversion rate,
as the case may be, at the time initially granted, issued or sold. For purposes of this
Section 2(b)(iii), if the terms of any Option or Convertible Security that was outstanding as
of the date of issuance of this Warrant are increased or decreased in the manner described in
the immediately preceding sentence, then such Option or Convertible Security and the shares
of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed
to have been issued as of the date of such increase or decrease. No adjustment pursuant to
this Section 2(b) shall be made if such adjustment would result in an increase of the
Exercise Price then in effect.

     (iv) Calculation of Consideration Received. If any Option or Convertible
Security is issued in connection with the issuance or sale or deemed issuance or sale of any
other securities of the Company, together comprising one integrated transaction, (x) such
Option or Convertible Security (as applicable) will be deemed to have been issued

8

 

for consideration equal to the Black Scholes Consideration Value thereof and (y) the
other securities issued or sold or deemed to have been issued or sold in such integrated
transaction shall be deemed to have been issued for consideration equal to the difference of
(I) the aggregate consideration received by the Company minus (II) the Black Scholes
Consideration Value of each such Option or Convertible Security (as applicable). If any
shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to
have been issued or sold for cash, the consideration received therefor will be deemed to be
the gross amount of consideration received by the Company therefor. If any shares of Common
Stock, Options or Convertible Securities are issued or sold for a consideration other than
cash, the amount of such consideration received by the Company will be the fair value of such
consideration, except where such consideration consists of publicly traded securities, in
which case the amount of consideration received by the Company for such securities will be
the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days
immediately preceding the date of receipt. If any shares of Common Stock, Options or
Convertible Securities are issued to the owners of the non-surviving entity in connection
with any merger in which the Company is the surviving entity, the amount of consideration
therefor will be deemed to be the fair value of such portion of the net assets and business
of the non-surviving entity as is attributable to such shares of Common Stock, Options or
Convertible Securities, as the case may be. The fair value of any consideration other than
cash or publicly traded securities will be determined jointly by the Company and the Holder.
If such parties are unable to reach agreement within ten (10) days after the occurrence of an
event requiring valuation (the “Valuation Event”), the fair value of such consideration will
be determined within five (5) Trading Days after the tenth (10th) day following
such Valuation Event by an independent, reputable appraiser jointly selected by the Company
and the Holder. The determination of such appraiser shall be final and binding upon all
parties absent manifest error and the fees and expenses of such appraiser shall be borne by
the Company.

     (v) Record Date. If the Company takes a record of the holders of shares of
Common Stock for the purpose of entitling them (A) to receive a dividend or other
distribution payable in shares of Common Stock, Options or in Convertible Securities or (B)
to subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then
such record date will be deemed to be the date of the issue or sale of the shares of Common
Stock deemed to have been issued or sold upon the declaration of such dividend or the making
of such other distribution or the date of the granting of such right of subscription or
purchase (as the case may be).

     (c) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price
pursuant to paragraphs (a), (b) or (d) 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).

     (d) Holder’s Right of Alternative Exercise Price Following Issuance of Convertible
Securities. Subject to Section 4(n) of the Securities Purchase Agreement, in addition to and
not

9

 

in limitation of the other provisions of this Section 2, if the Company in any manner issues
or sells any Options or Convertible Securities (any such securities, “Variable Price Securities”)
after the Subscription Date that are convertible into or exchangeable or exercisable for shares of
Common Stock at a price which varies or may vary with the market price of the Common Shares,
including by way of one or more reset(s) to a fixed price, but exclusive of such formulations
reflecting customary anti-dilution provisions (such as share splits, share combinations, share
dividends and similar transactions) (each of the formulations for such variable price being herein
referred to as, the “Variable Price”), the Company shall provide written notice thereof via
facsimile and overnight courier to the Holder on the date of issuance of such Convertible
Securities or Options. Subject to Section 4(n) of the Securities Purchase Agreement, from and
after the date the Company issues any such Convertible Securities or Options with a Variable Price,
the Holder shall have the right, but not the obligation, in its sole discretion to substitute the
Variable Price for the Exercise Price upon Exercise of this Warrant by it by designating in the
Exercise Notice delivered upon any Exercise of this Warrant that solely for purposes of such
Exercise the Holder is relying on the Variable Price rather than the Exercise Price then in effect.
The Holder’s election to rely on a Variable Price for a particular Exercise of this Warrant shall
not obligate the Holder to rely on a Variable Price for any future Exercises of this Warrant.

     (e) Other Events. In the event that the Company (or any Subsidiary thereof) shall take
any action to which the provisions hereof are not strictly applicable, or, if applicable, would not
operate to protect the Holder from dilution or if any event occurs of the type contemplated by the
provisions of this Section 2 but not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom stock rights or other rights with
equity features), then the Company’s board of directors shall in good faith determine and implement
an appropriate adjustment in the Exercise Price and the number of Warrant Shares (if applicable) so
as to protect the rights of the Holder, provided that no such adjustment pursuant to this Section
2(d) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise
determined pursuant to this Section 2, provided further that if the Holder does not accept such
adjustments as appropriately protecting its interests hereunder against such dilution, then the
Company’s board of directors and the Holder shall agree, in good faith, upon an independent
investment bank of nationally recognized standing to make such appropriate adjustments, whose
determination shall be final and binding and whose fees and expenses shall be borne by the Company.

     (f) 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

10

 

rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time
after the issuance of this Warrant, then, in each such case, 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.

     (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 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

11

 

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 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) Black Scholes Value. Notwithstanding the foregoing and the provisions of Section
4(b) above, in the event of a Change of Control (including, without limitation, a Change of Control
that occurs prior to the Initial Exercise Date), if the Holder has not exercised this Warrant in
full prior to the consummation of such Change of Control, at the request of the Holder delivered
before the ninetieth (90th) day after the consummation of such Change of Control, the
Company or the Successor Entity (as the case may be) shall purchase this Warrant from the Holder on
the date of such request by paying to the Holder cash in an amount equal to

12

 

the Black Scholes Value of the unexercised portion of this Warrant that remained on the date
of the consummation of such Change of Control.

     (d) 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 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.

13

 

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.

     (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, as indicated on the face of such new Warrant which is the same as the
Issuance Date, 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

14

 

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 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

15

 

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.

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

16

 

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) “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.

     (b) “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).

17

 

     (c) “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 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.

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

     (e) “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.

     (f) “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(b)(iv) 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.

     (g) “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

18

 

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, 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.

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

     (i) “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.

     (j) “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.

     (k) “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 (which, solely for clarification
purposes, includes all Common Shares and all shares of Common Stock issuable upon exercise of the
Series A Warrants (as defined in the Securities Purchase Agreement) (without regard for any
limitations on exercise set forth therein) in accordance with the terms of the Registration Rights
Agreement).

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

     (m) “Expiration Date” means the date that is the fifth (5th) anniversary of the
Initial Exercise Date  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.

     (n) “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

19

 

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
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.

     (o) “Maximum Eligibility Number” means initially zero and shall be increased upon any exercise
of the Series B Warrant held by the Holder by such aggregate number of shares of Common Stock equal
to the quotient of (x) the applicable Aggregate Exercise Price (as defined in the Series B Warrant)
with respect to such exercise (assuming solely for such purpose that no portion of the Aggregate
Exercise Price is paid by Cashless Exercise (as defined in the Series B Warrant)) divided by (y)
the Exercise Price (as defined in the Series B Warrant) then in effect.

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

     (q) “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.

     (r) “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.

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

     (t) “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.

20

 

     (u) “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.

     (v) “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).

     (w) “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 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]

21

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly
executed as of the Issuance 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 C 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:

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