1,073,299 Shares RXi Pharmaceuticals Corporation Common Stock, par value $0.0001 per share PLACEMENT AGENCY AGREEMENT
Exhibit 10.1
1,073,299 Shares
RXi Pharmaceuticals Corporation
Common Stock, par value $0.0001 per share
June 24, 2008
▇▇▇▇▇▇▇▇▇ & Company, Inc.
Natixis Bleichroeder Inc.
Broadpoint Securities Group, Inc.
▇▇▇▇▇▇▇ Securities, Inc.
c/o Jefferies & Company, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Natixis Bleichroeder Inc.
Broadpoint Securities Group, Inc.
▇▇▇▇▇▇▇ Securities, Inc.
c/o Jefferies & Company, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Introductory. RXi Pharmaceuticals Corporation, a Delaware corporation (the “Company”),
proposes to issue and sell to certain purchasers (collectively, the “Purchasers”) up to an
aggregate of 1,073,299 shares of its common stock, par value $0.0001 per share (the “Common
Stock”), which are referred to herein as the “Securities.” The Securities will be offered and sold
to the Purchasers in a private placement (the “Placement”) without being registered under the
Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange
Commission (the “Commission”) thereunder (collectively, the “Securities Act”), in reliance upon
Section 4(2) (“Section 4(2)”) thereof and/or Regulation D (“Regulation D”) thereunder. The Company
hereby confirms that Jefferies & Company, Inc. (“Jefferies” or the “Representative”), Natixis
Bleichroeder Inc. (“Natixis”), Broadpoint Securities Group, Inc. (“Broadpoint”) and ▇▇▇▇▇▇▇
Securities, Inc. (“▇▇▇▇▇▇▇”) have agreed to act as Placement Agents (each of Jefferies, Natixis,
Broadpoint and ▇▇▇▇▇▇▇, a “Placement Agent” and, collectively, the “Placement Agents”) in
connection with the Placement, subject to the terms, conditions and other provisions of this
Agreement.
The Securities are to be sold to the Purchasers pursuant to several Securities Purchase
Agreements (collectively, the “Securities Purchase Agreement”, in the form attached hereto as
Exhibit A), and sometimes referred to herein as, the “Purchase Agreements”, to be entered
into by the Company and each of the Purchasers.
Holders of the Securities will be entitled to the benefits of those certain resale
registration rights set forth in the Securities Purchase Agreement (the “Resale Registration
Rights”) to be entered into between the Company and each of the Purchasers pursuant to which the
Company will agree, among other things, to file with the Commission a shelf registration statement
pursuant to Rule 415 under the Securities Act (the “Resale Registration Statement”) covering the
resale of the Securities, and to use its reasonable best efforts to cause the Resale Registration
Statement to be declared effective within the time periods specified in the Securities
Purchase Agreement.
This Agreement and the Securities Purchase Agreement, which contains the Resale Registration
Rights, are referred to herein collectively as the “Transaction Documents”, and the transactions
contemplated hereby and thereby are referred to herein collectively as the “Transactions.”
The Company has prepared a management presentation dated May 2008 (the “Management
Presentation”) to be used in connection with the Placement. The information in the Management
Presentation is based upon the Company’s public filings, including reports filed or furnished by
the Company under the Securities Exchange Act of 1934, as amended (the “Public Filings”), and the
rules and regulations of the Commission thereunder (collectively, the “Exchange Act”). The
Management Presentation and the Public Filings, shall collectively be hereinafter referred to as
the “Disclosure Package.”
The Company hereby confirms its agreement with the Placement Agents as follows:
Section 1. Representations, Warranties and Agreements of the Company and the Placement Agents.
A. Representations, Warranties and Agreements of the Company. In addition to the other
representations, warranties and agreements contained in this Agreement and Sections 3 and
4 of the Securities Purchase Agreement, which are incorporated herein by reference and upon
which each of the Placement Agents may rely as a third-party beneficiary thereof, the Company
hereby represents, warrants and agrees with, the Placement Agents as follows:
(a) No Material Misstatement or Omission. As of their respective dates (or, if amended or
superseded by a filing prior to the Closing Date, then on the date of such filing), the Public
Filings by the Company complied in all material respects with the requirements of the Securities
Act and the Exchange Act and the rules and regulations of the SEC promulgated thereunder. None of
the Management Presentation or the Public Filings, as of their respective dates, contains any
untrue statement of a material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading.
(b) Placement Materials. The Company has delivered to the Placement Agents copies of the
Management Presentation in such quantities and at such places as the Placement Agents have
reasonably requested or will reasonably request. The Company has not distributed and will not
distribute, prior to the Closing Date, any materials in connection with the Placement other than
the Management Presentation, its Public Filings and drafts or definitive versions of the
Transaction Documents.
(c) The Transaction Documents. The Company has all necessary power and authority to execute and
deliver the Transaction Documents and to perform and carry out its obligations hereunder and
thereunder; each of the Transaction Documents has been duly authorized by the Company and, when
executed and delivered by the Company, will constitute a
valid and binding agreement of the Company, enforceable against the Company in accordance with its
terms.
(d) Independent Accountants. BDO ▇▇▇▇▇▇▇, LLP, who have expressed their opinion with respect to
the financial statements (which term as used in this Agreement includes the related notes thereto)
included or incorporated by reference in the Public Filings, are (i) independent public or
certified public accountants as required by the Exchange Act, (ii) in compliance with the
applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation
S-X and (iii) a registered public accounting firm as defined by the Public Company Accounting
Oversight Board.
(e) Financial Projections. The statements (including the assumptions described therein)
included in the Management Presentation (i) are and will be within the coverage of Rule 175(b)
under the Securities Act to the extent such data constitute forward looking statements as defined
in Rule 175(c) and (ii) were and will be made by the Company with a reasonable basis and reflect
the Company’s good faith estimate of the matters described therein.
(f) Stock Exchange Listing. The Company shall cause the shares of Common Stock to be listed
on the NASDAQ Capital Market prior to the effectiveness of the Resale Registration Statement and
shall use its best efforts to maintain the continued listing of such shares of Common Stock.
(g) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required. The Company’s execution, delivery and performance of this Agreement, and each of the
Transaction Documents, do not, and will not, (i) conflict with or violate any provision of the
Company’s certificate or articles of incorporation, bylaws or other organizational or charter
documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) (a “Default”) under or result in the creation or imposition of
any security interest, mortgage, pledge, lien, charge, encumbrance or adverse claim upon any
property or assets of the Company, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement,
indenture, mortgage, loan or credit facility, note, contract, franchise, lease, debt or other
instrument or other understanding to which the Company is a party or by which any property or asset
of the Company is bound, or affected (each, an “Existing Instrument”) or require the consent of any
other party to any Existing Instrument or other third party, except to the extent that such
conflict, default, termination, amendment, acceleration or cancellation right would not reasonably
be expected to have a Material Adverse Change (defined as: any development that could reasonably be
expected to result in a material adverse change in the condition, financial or otherwise, or in the
earnings, business, operations or prospects, whether or not arising from transactions in the
ordinary course of business, any such change is called a “Material Adverse Change”), or (iii)
result in a violation of any law, rule, administrative regulation, order, judgment, injunction,
administrative or court decree or other restriction of any court or governmental authority to which
the Company is subject, or by which any property or asset of the Company is bound or affected,
except to the extent that such violation would not, individually or in the aggregate, result in a
Material Adverse Change. No consent, approval, authorization or other order of, or registration or
filing with, any court or other
governmental or regulatory authority or agency, is required for the Company’s execution,
delivery and performance of this Agreement.
(h) No Price Stabilization or Manipulation; Compliance with Regulation M, etc. The Company
has not taken, directly or indirectly, any action designed to or that might be reasonably expected
to cause or result in stabilization or manipulation of the price of any of the Securities or any
other “reference security” (as defined in Rule 100 of Regulation M under the 1934 Act (“Regulation
M”)), whether to facilitate the sale or resale of any of the Securities or otherwise, and has taken
no action which would directly or indirectly violate Regulation M or facilitate any short-selling
of the Securities offered or the underlying securities by Purchasers.
(i) Brokers. Except for the Placement Agents, there is no broker, finder or other party that
is entitled to receive from the Company any brokerage or finder’s fee or other fee or commission as
a result of the Placement or the transactions contemplated thereby.
(j) No Registration Required Under the Securities Act. Assuming the accuracy of the
representations and warranties of the Purchasers contained in the Purchase Agreements and the
compliance of such parties with the agreements set forth herein and therein, it is not necessary,
in connection with the issuance and sale of the Securities under the Transaction Documents, in the
manner contemplated by the Transaction Documents, to register the Securities under the Securities
Act.
(k) QIBs and Accredited Investors. The Company will not offer or sell any of the Securities
to any person whom it reasonably believes is not (i) a “qualified institutional buyer” as defined
in Rule 144A (“QIBs”) or (ii) an institutional “accredited investor” (as defined in clauses (1),
(2), (3) and (7) of Rule 501(a) of Regulation D).
(l) Purchasers; Compliance With Rule 502(d). The Company will exercise reasonable care to
assure that the Purchasers are not “underwriters” within the meaning of Section 2(a)(11) of the
Securities Act and, without limiting the foregoing, that such purchases will comply with Rule
502(d) under the Securities Act.
(m) No General Solicitation. Neither the Company nor any of its Affiliates have engaged, and
will engage, directly or indirectly in any form of “general solicitation” or “general advertising”
in connection with the offering of the Securities (as those terms are used in Regulation D) under
the Securities Act or in any manner involving a public offering within the meaning of Section 4(2);
and the Company has not entered, and will not enter, into any arrangement or agreement with respect
to the distribution of the Securities, except for the Transaction Documents, and the Company agrees
not to enter into any such arrangement or agreement.
(n) No Integration. Neither the Company nor any of its affiliates has directly or indirectly
sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of any
“security” (as defined in the Securities Act) that is, or would be, integrated with the sale of any
of the Securities in a manner that would require the registration under the Securities Act of any
of the Securities.
(o) No Directed Selling Efforts. None of the Company, its affiliates nor any person acting on
its or their behalf (other than the Placement Agents in connection with this Agreement) has engaged
or will engage in any directed selling efforts (as that term is defined in Regulation S) with
respect to the Securities and each of the Company, its affiliates and any person acting on its or
their behalf (other than the Placement Agents in connection with this Agreement) has complied and
will comply with the offering restrictions requirement of Regulation S.
(p) No Offer and Sale Within Six Months. The Company has not sold or issued any security of
the same or similar class or series as any of the Securities or any security convertible into, or
exercisable for, shares of Common Stock during the six-month period preceding the earlier of the
date of the Purchase Agreements and the Closing Date, including any sales pursuant to Rule 144A or
Regulation D (other than shares issued pursuant to employee benefit plans, qualified stock options
plans or other employee or director compensation plans or pursuant to outstanding options, rights
or warrants), and has no intention of making, an offer or sale of such securities, for a period of
six months after the date of the Purchase Agreements, except for (i) the offering of Securities as
contemplated by the Transaction Documents and (ii) any offer or sale of securities that would not
be integrated with the sale of any of the Securities in a manner that would require the
registration under the Securities Act of the sale by the Company of the Securities, provided that
any such offering and sale of securities (other than shares issued pursuant to employee benefit
plans, qualified stock options plans or other employee or director compensation plans or pursuant
to outstanding options, rights or warrants) made within six months of the date hereof shall be
accompanied by an opinion addressed to or that may be relied upon by the Placement Agents, and
provided further, that in no event shall the Company offer or sell any securities prior to the
expiration of the Lock-up Period set forth in Section 3(h) herein, except as otherwise permitted by
Section 3(h). As used in this paragraph, the terms “offer” and “sale” have the meanings specified
in Section 2(a)(3) of the Securities Act.
The Company acknowledges that each of the Placement Agents and, for purposes of the opinion to
be delivered pursuant to Section 4 hereof, counsel to the Company, will rely upon the
accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.
B. Representations,
Warranties and Agreements of the Placement Agent. Each of the
Placement Agents, severally and not jointly, hereby represents, warrants and covenants to, and
agrees with, the Company as follows:
(a) No General Solicitation. Such Placement Agent will not solicit offers for the Company for
the Securities by means of any form of general solicitation or general advertising in connection
with the offering of the Securities or in any manner involving a public offering within the meaning
of Section 4(2).
(b) Limitation on Offerees. Such Placement Agent will solicit offers for the Company for the
Securities only from persons whom it reasonably believes to be (i) a QIB or (ii) an institutional
“accredited investor.”
Section 2. Engagement of Placement Agents; Fees; Expenses.
(a) Engagement of Placement Agents. The Company agrees that it has engaged Jefferies, Natixis,
Broadpoint and ▇▇▇▇▇▇▇ as the Placement Agents, and the Company hereby authorizes the Placement
Agents as its exclusive agents to act as such in connection with the Placement. On the basis of
the representations, warranties and agreements of the Company contained in this Agreement and
subject to, and in accordance with, the terms, conditions and other provisions hereof, each of
Jefferies, Natixis, Broadpoint and ▇▇▇▇▇▇▇ agrees to act as Placement Agent to place the Securities
as contemplated by this Agreement. The Company acknowledges that the Placement Agents’ engagement
hereunder does not constitute any firm commitment or undertaking, express or implied, on the part
of any Placement Agent to purchase or place any of the Securities and does not constitute any
representation, warranty or agreement that any financing will be available to the Company.
(b) Placement Agents’ Fees and Expenses. As compensation for the Placement Agents’ services
hereunder, the Company hereby agrees to pay the Representative, on behalf of the Placement Agents,
on the closing date of the Placement (the “Closing Date”) the fee or gross spread, as applicable,
in an amount equal to six percent (6%) of the aggregate gross proceeds to the Company from the
placement of the Securities. In addition to any fees that may be paid to the Placement Agents
hereunder, whether or not any Transaction occurs or this Agreement is otherwise terminated, the
Company will reimburse the Placement Agents, promptly upon receipt of an invoice therefor, for all
out-of-pocket expenses (including reasonable fees and expenses of Placement Agents’ counsel, and
the reasonable fees and expenses of any other independent experts retained by the Placement Agents)
incurred by the Placement Agents in connection with the Transactions and the Engagement Letter
(defined below), in an amount not to exceed $50,000 (other than the fees and expenses of Placement
Agents’ counsel) without the Company’s consent (not to be unreasonably withheld).
(c) Placement Agents as Independent Contractor. The Company hereby acknowledges that, in
connection with the Transactions, (i) the Placement, including the determination of the offering
price of the Securities and any related discounts, commissions and fees, shall be an arm’s-length
commercial transaction between the Company and the Purchasers, (ii) each Placement Agent will be
acting as an independent contractor and will not be the agent or fiduciary of the Company or its
stockholders, creditors, employees, the Purchasers or any other party, (iii) no Placement Agent
shall assume an advisory or fiduciary responsibility in favor of the Company (irrespective of
whether such Placement Agent has advised or is currently advising the Company on other matters) and
no Placement Agent shall have an obligation to the Company with respect to the Transactions except
as may be set forth expressly herein, (iv) any Placement Agent and its affiliates may be engaged in
a broad range of transactions that involve interests that differ from those of the Company and (v)
no Placement Agent shall provide any legal, accounting, regulatory or tax advice with respect to
the Transactions and the Company shall consult its own legal, accounting, regulatory and tax
advisors to the extent it deems appropriate.
(d) Company Responsible for the Disclosure Package. The Company is and will be solely
responsible for the contents of the Disclosure Package and any and all other written or oral
communications provided to any actual or prospective purchaser of the Securities with the approval
of the Company; and the Company recognizes that the Placement Agents, in acting pursuant to this
Agreement, will be using information provided by the Company and its agents
and representatives and no Placement Agent assumes responsibility for, and each may rely,
without independent verification, on the accuracy and completeness of any such information.
(e) Notification of Potential Purchasers. In order to allow proper coordination of the
proposed Placement, during the term of this engagement, the Company will promptly notify the
Representative of any potential purchasers known to the Company to be interested in purchasing any
of the Securities, and the Company will keep the Representative fully and promptly informed of the
status of any discussions or negotiations between the Company and any such potential purchasers.
(f) Confidentiality. The Company agrees that any information or advice rendered by any
Placement Agent or any of its representatives in connection with this engagement is for the
confidential use of the Company only and the Company will not, and will not permit any third party
to, disclose or otherwise refer to such advice or information, or to the Placement Agents, in any
manner without such Placement Agent’s prior written consent.
Section 3. Additional Covenants and Agreements of the Company. The Company further covenants and
agrees with the Placement Agents as follows:
(a) Representative’s Review of Proposed Amendments and Supplements. During the period
beginning on the date hereof and ending on the Closing Date, prior to amending or supplementing the
Disclosure Package (including any amendment or supplement of any Public Filing that is incorporated
or deemed incorporated by reference therein), the Company shall furnish to the Representative for
review a copy of each such proposed amendment or supplement prior to its distribution or filing.
(b) Amendments and Supplements to the Disclosure Package. If, prior to the Closing Date, any
event shall occur or condition exist as a result of which it is necessary to amend or supplement
the information or documents, or other information or documents incorporated or deemed incorporated
by reference, in the Disclosure Package (including any amendment or supplement of any Public Filing
that is incorporated or deemed incorporated by reference therein) in order to make the statements
therein, in the light of the circumstances when the Management Presentation or any other document
contained or incorporated or deemed incorporated by reference in the Disclosure Package is
delivered to a Purchaser, not misleading, or if it is otherwise necessary to amend or supplement
any portion of the Disclosure Package to comply with law, the Company agrees to promptly prepare
and furnish at its own expense to the Placement Agents, amendments or supplements to the Disclosure
Package so that the statements therein as so amended or supplemented will not, in the light of the
circumstances when the Disclosure Package is delivered to a Purchaser, be misleading or so that the
Disclosure Package, as amended or supplemented, will comply with law. Neither a Placement Agent’s
consent to, or delivery of, any such amendment or supplement shall constitute a waiver of any of
the Company’s obligations under this Section 3(b).
(c) Copies of any Amendments and Supplements to the Disclosure Package. The Company agrees to
furnish the Representative and counsel to the Representative, without charge, as soon as available,
as many copies of any amendments and supplements to the Disclosure
Package (including any documents incorporated or deemed incorporated by reference therein) as
the Representative or its counsel may request.
(d) Marketing. The Company shall participate, and cause its officers and representatives to
participate, in the Placement as reasonably requested by the Representative, including in the
marketing of the Securities and meeting with prospective purchasers of any of the Securities, and
afford prospective purchasers the opportunity to conduct customary due diligence and make inquiries
relevant to their investment decisions regarding the Securities.
(e) Blue Sky Compliance. The Company shall cooperate with the Placement Agents and counsel
for the Placement Agents to qualify or register the Securities for sale under (or obtain exemptions
from the application of) the state securities or blue sky laws of those jurisdictions designated by
the Placement Agents, shall comply with such laws and shall continue such qualifications,
registrations and exemptions in effect so long as required for the distribution of the Securities.
The Company shall not be required to qualify as a foreign corporation or to take any action that
would subject it to general service of process in any such jurisdiction where it is not presently
qualified or where it would be subject to taxation as a foreign corporation. The Company will
advise the Placement Agents promptly of the suspension of the qualification or registration of (or
any such exemption relating to) the Securities for offering, sale or trading in any jurisdiction or
any initiation or threat of any proceeding for any such purpose, and in the event of the issuance
of any order suspending such qualification, registration or exemption, the Company shall use its
best efforts to obtain the withdrawal thereof at the earliest possible moment.
(f) Use of Proceeds. The Company shall apply the net proceeds from the sale of the Securities
sold by it in the manner to be described under the caption “Use of Proceeds” in the Purchase
Agreements.
(g) Transfer Agent. The Company shall maintain, at its expense, a registrar and transfer
agent for the Securities.
(h) Agreement Not to Offer or Sell Additional Shares; Lock-Up Agreements for Directors and
Officers; Enforcement of Existing Lock-p Agreements.
(i) During the period commencing on the date hereof and ending on the 45th
day following the date of the Final Prospectus relating to the registration of the sale of
the Securities (the “Lock-up Period”), the Company will not, without the prior written
consent of the Placement Agents (which consent may be withheld at the sole discretion of the
Representative), directly or indirectly, sell, offer, contract or grant any option to sell,
pledge, transfer or establish an open “put equivalent position” within the meaning of Rule
16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or announce the
offering of, or file any registration statement under the Securities Act in respect of, any
shares of Common Stock, options or warrants to acquire shares of Common Stock or securities
exchangeable or exerciseable for or convertible into shares of Common Stock; provided,
however, that the Company may issue shares of its Common Stock, options to purchase its
shares of Common Stock or shares of Common Stock upon exercise of options, pursuant to any
stock option, stock bonus or other stock
plan or arrangement described in the Public Filings, other than (i) the registration of
the Registrable Securities (as defined in the Securities Purchase Agreement), (ii) issuances
of Common Stock upon the exercise of options or warrants disclosed as outstanding in all
reports filed by the Company under the Exchange Act prior to the date hereof, (iii) the
issuance of equity incentives to employees pursuant to an equity incentive plan, (iv)
issuances of shares of Common Stock or any securities convertible into or exercisable for
Common Stock in connection with a strategic licensing arrangement, corporate partnering
transaction or similar collaboration; (v) agreements to issue shares of Common Stock or any
securities convertible into or exercisable for Common Stock, and the issuance of shares of
Common Stock, in connection with an acquisition, by merger or consolidation with, or by
purchase of all or a substantial portion of the assets of, or by any other manner, of any
business or corporation, partnership, association or other business organization or division
thereof; (vi) any registration of securities on Form S-4 or S-8 or similar forms and (vii)
any post-effective amendments to registration statements effective as of the Effective Date.
(ii) On or prior to the date hereof, the Company shall have furnished to the Placement
Agents (A) an agreement in the form of Exhibit B-1 hereto from each director and
officer and (B) an agreement in the form of Exhibit B-2 hereto from CytRx
Corporation, and such agreements shall be in full force and effect on the Closing Date.
(i) Existing Lock-Up Agreement. The Company will enforce all existing agreements between the
Company and any of its security holders that prohibit the sale, transfer, assignment, pledge or
hypothecation of any of the Company’s securities in connection with the Placement. In addition,
the Company will direct the transfer agent to place stop transfer restrictions upon any such
securities of the Company that are bound by such existing “lock-up” agreements for the duration of
the periods contemplated in such agreements.
(j) Investment Limitation. The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Securities in such a manner as would require the
Company to register as an investment company under the Investment Company Act.
(k) No Stabilization or Manipulation. The Company will not take, directly or indirectly, any
action designed to or that might be reasonably expected to cause or result in stabilization or
manipulation of the price of the Securities or any other reference security, whether to facilitate
the sale or resale of the Securities or otherwise.
(l) Press Release. Prior to the earlier of the Closing Date or the termination of this
Agreement, not to issue any press release or other communication directly or indirectly or hold any
press conference with respect to the Company, its condition, financial or otherwise, or earnings,
business affairs or business prospects (except for routine communications and presentations in the
ordinary course of business and consistent with the past practices of the Company and of which the
Placement Agents are notified), without the prior written consent of the Representative, unless in
the judgment of the Company and its counsel, and after notification to the Placement Agents, such
press release or communication is required by law.
Section 4. Conditions of the Placement Agents’ Obligations. The respective obligations of the
several Placement Agents as provided herein shall be subject to the accuracy
of the representations, warranties and agreements of the Company set forth herein as of the date
hereof and as of the Closing Date as though then made, to the timely performance by the Company of
its covenants and other obligations hereunder, and to each of the following conditions:
(a) No Material Adverse Change. For the period from and after the date of this Agreement and
prior to the Closing Date, in the judgment of the Representative, there shall have not occurred any
Material Adverse Change.
(b) Opinions of Counsel for the Company. On the Closing Date, the Placement Agents shall have
received the opinion of counsel to the Company, dated as of such Closing Date, substantially in the
form attached as Exhibit C. The opinion required herein may be that opinion provided to
the Purchasers by counsel to the Company pursuant to the Securities Purchase Agreement, provided
such opinion is addressed to the Placement Agents and substantially covers the subject matter set
forth in Exhibit C hereto.
(c) Officers’ Certificate. On the Closing Date, the Placement Agents shall have received a written
certificate executed by the Chairman of the Board, Chief Executive Officer or President of the
Company and the Chief Financial Officer or Chief Accounting Officer of the Company, dated as of the
Closing Date, to the effect that:
(i) for the period from and after the date of this Agreement and prior to the Closing
Date, there has not occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of the Company set forth in
Section 1(A) of this Agreement and incorporated herein by reference from the
Securities Purchase Agreement are true and correct with the same force and effect as though
expressly made on and as of such Closing Date; and
(iii) the Company has performed, satisfied and complied with all the covenants,
agreements and conditions required hereunder at or prior to such Closing Date.
(d) The Placement Agents shall not have discovered and disclosed to the Company prior to or on
the Closing Date that the Disclosure Package, in the opinion of counsel to the Placement Agents,
contains an untrue statement of a material fact or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading.
(e) All corporate proceedings and other legal matters incident to the authorization, form and
validity of the Transaction Documents and Securities and all other legal matters relating to the
offering, issuance and sale, as applicable, of the Securities and the other Transactions shall be
reasonably satisfactory in all material respects to the Representative; and the Company shall have
furnished to Proskauer Rose LLP, counsel to the Placement Agents, all documents and information
that it may reasonably request to enable them to pass upon such matters, including a Secretary’s
Certificate, if requested.
(f) The Company has not sustained since the date of the latest audited financial statements
incorporated or deemed incorporated by reference in the Disclosure Package (i) any material loss or
interference with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any strike, job action, slowdown, work stoppage, labor dispute or
court or governmental action, order or decree or (ii) since such date, there shall not have been
any change in the common stock, short-term debt or long-term debt of the Company or any Material
Adverse Change, the effect of which, in any such case set forth in clause (i) or (ii), is, in the
judgment of the Representative, so material and adverse as to make it impracticable or inadvisable
to proceed with the Placement or the delivery of the Securities being delivered on the Closing Date
on the terms and in the manner contemplated in this Agreement and the Purchase Agreements.
(g) Subsequent to the execution and delivery of this Agreement, there shall not have occurred
any of the following: (i) trading in securities generally on the New York Stock Exchange, the
American Stock Exchange, the National Association of Securities Dealers Automated Quotation System
or in the over-the-counter market, or trading in any securities of the Company on any exchange or
in the over-the-counter market, shall have been suspended or the settlement of such trading
generally shall have been materially disrupted or minimum prices shall have been established on any
such exchange or such market by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have been declared by
Federal or state authorities of the United States, (iii) the United States shall have become
engaged in hostilities, there shall have been a significant escalation in hostilities involving the
United States or there shall have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred any other calamity or crisis or any change in general
domestic or international economic, political or financial conditions, including without limitation
as a result of terrorist activities, or the effect of international conditions on the financial
markets in the United States shall be such, as to make it, in the sole discretion of the
Representative, impracticable or inadvisable to proceed with the Placement or delivery of the
Securities being delivered on the Closing Date on the terms and in the manner contemplated in this
Agreement and the Purchase Agreements.
(h) Each of the Transaction Documents, other than this Agreement, shall be in form and
substance reasonably satisfactory to the Representative and shall have been duly executed and
delivered by the Company and the other parties thereto, and the Securities shall have been duly
executed and delivered by the Company.
(i) All conditions to closing of the Purchase Agreements shall be satisfied or, where
applicable, waived.
(j) The sale of the Securities shall not be enjoined (temporarily or permanently) on the
Closing Date.
(k) Additional Documents. On or before the Closing Date, the Placement Agents shall have received
such information, documents and opinions as they may reasonably require in order to evidence the
accuracy of any of the representations and warranties, or the satisfaction of any of the conditions
or agreements, herein contained.
Section 5. Indemnification.
(a) Indemnification of the Placement Agents. The Company agrees to indemnify and hold harmless
each of the Placement Agents and their respective affiliates and their respective officers,
directors, managers, members, partners, employees and agents, and any other persons controlling
such Placement Agent or any of its affiliates within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act (each Placement Agent and each such other person
being referred to as an “Indemnified Person”), to the fullest extent lawful, from and against all
claims, liabilities, losses, damages and expenses (or any actions, claims, suits or proceedings in
respect thereof), as incurred (“Losses”) related to or arising out of or in connection with such
Placement Agent’s services hereunder, to which such Indemnified Person may become subject under the
Securities Act, the Exchange Act or other federal or state statutory law or regulation, or the laws
or regulations of foreign jurisdictions where the Securities have been offered or at common law or
otherwise (including in settlement of any litigation), insofar as such Losses (or actions in
respect thereof as contemplated below) arises out of or is based upon:
(A) (i) any untrue statement or alleged untrue statement of a material fact contained
in the Disclosure Package (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading;
(ii) any untrue statement or alleged untrue statement of a material fact contained in
any materials or information provided to investors by, or with the approval in writing of,
the Company in connection with the marketing of the Securities and the Placement, including
any roadshow or investor presentations made to investors by the Company (whether in person
or electronically), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; or
(iii) any breach by the Company of any representation or warranty or failure to comply
with any of the covenants and agreements contained or incorporated by reference in this
Agreement; and
(B) the violation by the Company of any applicable laws or regulations of any
jurisdiction where the Securities have been offered; and to reimburse the Indemnified Person
for:
(i) all expenses (including, without limitation, reasonable fees and expenses of
counsel chosen by the Representative) as such expenses are incurred by the Placement Agents
in connection with investigating, preparing, defending or settling any action or claim for
which indemnification has or is reasonably likely to be sought by the Indemnified Person,
whether or not in connection with litigation in which any Indemnified Person is a named
party; and
(ii) any other Losses incurred by the Placement Agents.
The indemnity agreement set forth in this Section 5(a) shall be in addition to any
liabilities that the Company may otherwise have, including without limitation under Schedule
A of the Engagement Letter, dated April 28, 2008 (the “Engagement Letter”) between Jefferies
and the Company, a copy of which is attached as Exhibit D hereto.
(b) Notifications and Other Indemnification Procedures. Promptly after receipt by an
Indemnified Person under this Section 5 of notice of the commencement of any action, such
Indemnified Person will, if a claim in respect thereof is to be made against the Company under this
Section 5, notify the Company in writing of the commencement thereof, but the omission so
to notify the Company will not relieve it from any liability which it may have to any Indemnified
Person for indemnification, except to the extent that the Company shall have been materially
prejudiced by such failure. In case any such action is brought against any Indemnified Person and
such Indemnified Person seeks or intends to seek indemnity from an Company, the Company will be
entitled to participate in, and, to the extent that it shall elect, jointly with all other
indemnifying parties similarly notified, by written notice delivered to the Indemnified Person
promptly after receiving the aforesaid notice from such Indemnified Person, to assume the defense
thereof with counsel reasonably satisfactory to such Indemnified Person; provided, however, if the
defendants in any such action include both the Indemnified Person and the Company and the
Indemnified Person shall have reasonably concluded that a conflict may arise between the positions
of the Company and the Indemnified Person in conducting the defense of any such action or that
there may be legal defenses available to it and/or other indemnified parties which are different
from or additional to those available to the Company, the Indemnified Person or parties shall have
the right to select separate counsel to assume such legal defenses and to otherwise participate in
the defense of such action on behalf of such Indemnified Person or parties. Upon receipt of notice
from the Company to such Indemnified Person of the Company’s election so to assume the defense of
such action and approval by the Indemnified Person of counsel, the Company will not be liable to
such Indemnified Person under this Section 5 for any legal or other expenses subsequently
incurred by such Indemnified Person in connection with the defense thereof unless (i) the
Indemnified Person shall have employed separate counsel in accordance with the proviso to the
preceding sentence (it being understood, however, that the Company shall not be liable for the
expenses of more than one separate counsel (together with local counsel), approved by the Company,
representing the indemnified parties who are parties to such action) or (ii) the Company shall not
have employed counsel satisfactory to the Indemnified Person to represent the Indemnified Person
within a reasonable time after notice of commencement of the action, in each of which cases the
fees and expenses of counsel shall be at the expense of the Company.
(c) Settlements. The Company under this Section 5 shall not be liable for any
settlement of any proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with such consent or if there be a final judgment for the
plaintiff, the Company agrees to indemnify the Indemnified Person against any Losses by reason of
such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested the Company to reimburse the Indemnified Person for fees and expenses
of counsel as contemplated by Section 5(b) hereof, the Company agrees that it shall be
liable for any settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by the Company of the aforesaid request
and (ii) the Company shall not have reimbursed the Indemnified Person in accordance
with such request prior to the date of such settlement. The Company shall not, without the
prior written consent of the Indemnified Person, effect any settlement, compromise or consent to
the entry of judgment in any pending or threatened action, suit or proceeding in respect of which
any Indemnified Person is or could have been a party and indemnity was or could have been sought
hereunder by such Indemnified Person, unless such settlement, compromise or consent includes (i) an
unconditional release of such Indemnified Person from all liability on claims that are the subject
matter of such action, suit or proceeding and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act, by or on behalf of any Indemnified Person.
Section 6. Contribution. If the indemnification provided for in Section 5 is for any
reason held to be unavailable to or otherwise insufficient to hold harmless an Indemnified Person
in respect of any Losses referred to therein, then the Company shall contribute to the aggregate
amount paid or payable by such Indemnified Person, as incurred, as a result of any Losses referred
to therein (i) in such proportion as is appropriate to reflect the relative benefits received by
the Company, on the one hand, and the Placement Agents, on the other hand, from the Placement
pursuant to this Agreement or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, on the one hand, and
the Placement Agents, on the other hand, in connection with the statements or omissions which
resulted in such Losses, as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand, and the Placement Agents, on the other hand, in
connection with the Placement pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the Placement pursuant to this Agreement
(before deducting expenses) received by the Company, and the fee received by the Placement Agents
in connection with the Placement. The relative fault of the Company, on the one hand, and the
Placement Agents, on the other hand, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company, on the one hand,
or the Placement Agents, on the other hand, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. Notwithstanding the
provisions of this Section 6, the Placement Agents’ obligations to contribute, if any,
pursuant to this Section are several, and not joint, and the aggregate contribution of all
Indemnified Persons to all Losses shall not exceed the amount of the fees actually received by such
Placement Agent pursuant to this Agreement with respect to the services rendered pursuant to this
Agreement.
The Company agrees to reimburse the Indemnified Persons for all expenses (including, without
limitation, reasonable fees and expenses of counsel) as they are incurred in connection with
investigating, preparing, defending or settling any action or claim for which contribution has been
sought by the Indemnified Person, whether or not in connection with litigation in which any
Indemnified Person is a named party.
The provisions set forth in Section 5(c) with respect to notice of commencement of any
action shall apply if a claim for contribution is to be made under this Section 6;
provided, however, that no additional notice shall be required with respect to any action for which
notice has been given under Section 5(b) for purposes of indemnification.
The Company and the Placement Agents agree that it would not be just and equitable if
contribution pursuant to this Section 6 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable considerations referred to
in this Section 6.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6, each officer and employee of
each of the Placement Agents and each person, if any, who controls such Placement Agent within the
meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as
such Placement Agent.
Section 7. Effectiveness of this Agreement; Termination; and Survival.
(a) This Agreement shall become effective upon signing by the parties hereto.
(b) Any Placement Agent may resign at any time and the Company may terminate such Placement
Agent’s services at any time, each by giving at least ten days’ prior written notice to the other.
If such Placement Agent resigns because of the failure of any condition specified in Section
4 to be satisfied when and as required (whether or not the Company’s fault directly or
indirectly) or the Company terminates such Placement Agent’s services for any reason, such
Placement Agent and its counsel shall be entitled to receive all of the amounts due pursuant to the
Engagement Letter up to, and including, the effective date of such expiration, termination or
resignation, as the case may be.
(c) If the Placement Agents’ services hereunder are terminated by the Company, other than a
termination following such Placement Agent’s gross negligence or intentional misconduct (after
notice to such Placement Agent, and an opportunity to cure, if curable), and the Company completes
an offering or other “Transaction” (as such defined in Section 1 of the Engagement Letter) of
equity or equity-linked securities within six months of such termination with any party, the
Company shall pay the Representative, on behalf of the Placement Agents concurrently with the
closing of such transaction the fees set forth in the Engagement Letter and Section 2(b) of
this Agreement.
(d) The respective representations, warranties and other statements of the Company and its
officers and the agreements, covenants and the indemnities set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation made by or on
behalf of the Placement Agents or the Company or any of its or their partners, officers or
directors or any controlling person, as the case may be, and will survive delivery of and payment
for the Securities sold hereunder or any termination of this Agreement (for whatever reason).
Section 8. Notices. All communications hereunder shall be in writing and shall be mailed, hand
delivered or telecopied and confirmed to the parties hereto as follows:
If to the Placement Agents, c/o the Representative:
▇▇▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to:
Proskauer Rose LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
If to the Company:
with a copy to:
Ropes & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Any party hereto may change the address for receipt of communications by giving written notice
to the others.
Section 9. Successors. This Agreement will inure to the benefit of and be binding upon the parties
hereto, and to the benefit of the employees, officers and directors and controlling persons
referred to in Section 5 and Section 6, and in each case their respective
successors, and personal representatives, and no other person will have any right or obligation
hereunder. The term “successors” shall not include any Purchaser.
Section 10. Partial Unenforceability. The invalidity or unenforceability of any Section, paragraph
or provision of this Agreement shall not affect the validity or enforceability of any other
Section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement
is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid and enforceable.
Section 11. Governing Law Provisions. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the Transactions (“Related Proceedings”) may be
instituted in the federal courts of the United States of America located in the Borough of
Manhattan in the City of New York or the courts of the State of New York in each case located in
the Borough of Manhattan in the City of New York (collectively, the “Specified Courts”), and each
party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a “Related Judgment”), as to which such
jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding.
Section 12. General Provisions. This Agreement and the Engagement Letter constitute the entire
agreement of the parties to this Agreement with respect to the subject matter hereof and thereof
and supersedes all prior written or oral and all contemporaneous oral agreements, understandings
and negotiations with respect to the subject matter hereof and thereof, except for those certain
terms incorporated into this Placement Agent Agreement from the Purchase Agreements. Nothing in
this Agreement should be read to limit or otherwise modify the terms and other provisions of the
Engagement Letter, provided that, in the event any terms of the Engagement Letter or
Indemnification Letter are inconsistent with or contradict any terms of this Agreement, this
Agreement shall govern. This Agreement may be executed in two or more counterparts, each one of
which shall be an original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived unless waived in writing
by each party whom the condition is meant to benefit. The failure by any party to exercise any
right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof. The Section headings herein are for the convenience
of the parties only and shall not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business person who was
adequately represented by counsel during negotiations regarding the provisions hereof, including,
without limitation, the indemnification provisions of Section 5 and the contribution
provisions of Section 6, and is fully informed regarding said provisions. Each of the
parties hereto further acknowledges that the provisions of Sections 5 and 6 hereto fairly
allocate the risks in light of the ability of the parties to investigate the Company, its affairs
and its business in order to assure that adequate disclosure has been made in the Disclosure
Package (and any amendments and supplements thereto), as required by the Securities Act, the
Exchange Act and any other applicable law.
Section 13. Authority of the Representative. In connection with this Agreement, Jefferies
will act as the Representative for and on behalf of the Placement Agents, and any action taken
under this Agreement by the Representative, will be binding on all the Placement Agents. Each of
Natixis, ▇▇▇▇▇▇▇ and Broadpoint authorizes Jefferies to manage the Placement and to take such
action in connection therewith as Jefferies in its sole discretion deems appropriate or desirable,
consistent with the provisions of the Agreement Among Placement Agents previously entered into
between Jefferies and each of Natixis, ▇▇▇▇▇▇▇ and Broadpoint.
If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Company the enclosed copies hereof, whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance with its terms.
| Very truly yours, RXi PHARMACEUTICALS CORPORATION |
|||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | ||||
| Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||||
| Title: Chief Financial Officer | |||||
| The foregoing Placement Agency | ||||||||
| Agreement is hereby confirmed | ||||||||
| and accepted by the Placement Agents | ||||||||
| in New York, New York as of the | ||||||||
| date first above written. | ||||||||
| ▇▇▇▇▇▇▇▇▇ & COMPANY, INC. | ||||||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||||
| Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||||
| Title: Managing Director | ||||||||
| NATIXIS BLEICHROEDER INC. | ||||||||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ | |||||||
| Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ | ||||||||
| Title: Senior Managing Director | ||||||||
| BROADPOINT SECURITIES GROUP, INC. | ▇▇▇▇▇▇▇ SECURITIES, INC. | |||||||
By:
|
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ | By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ | Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||||||
| Title: Managing Director | Title: President and CEO | |||||||
EXHIBIT A
SECURITIES PURCHASE AGREEMENT
EXHIBIT B-1
FORM OF D&O LOCK-UP AGREEMENT
FORM OF D&O LOCK-UP AGREEMENT
[ ], 2008
▇▇▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
RE: RXi Pharmaceuticals Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
RE: RXi Pharmaceuticals Corporation
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares (“Shares”) of the
Common Stock (the “Common Stock”), par value $0.0001 per share, of RXi Pharmaceuticals Corporation
(the “Company”) or securities convertible into or exchangeable or exercisable for Shares. The
Company is proposing a private placement of Common Stock (the “Placement”) for which you will act
as the Placement Agent. The undersigned recognizes that the Placement will be of benefit to the
undersigned and will benefit the Company by, among other things, raising additional capital for its
operations. The undersigned acknowledges that you are relying on the representations and
agreements of the undersigned contained in this letter in carrying out the Placement and in
entering into a placement agency agreement (the “Placement Agency Agreement”) with the Company with
respect to the Placement.
In consideration of the foregoing, the undersigned hereby agrees that the undersigned will not
(and will cause any spouse or immediate family member of the spouse or the undersigned living in
the undersigned’s household not to), without the prior written consent of Jefferies & Company, Inc.
(which consent may be withheld in its sole discretion), directly or indirectly, sell, offer,
contract or grant any option to sell (including without limitation any short sale), pledge,
transfer, establish an open “put equivalent position” within the meaning of Rule 16a-1(h) under the
Securities Exchange Act of 1934, as amended, or otherwise dispose of any Shares, options or
warrants to acquire Shares, or securities exchangeable or exercisable for or convertible into
Shares currently or hereafter owned either of record or beneficially (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended) by the undersigned (or such spouse or family
member), or publicly announce an intention to do any of the foregoing, for a period commencing on
the date hereof and continuing through the close of trading on the date which is 45 days after the
date of the Final Prospectus filed with respect to the Shares issued in the Placement, provided
that such Final Prospectus is filed no later than 120 days after the Closing Date (as defined in
the Placement Agency Agreement). The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company’s transfer agent and registrar against the transfer of
Shares or securities convertible into or exchangeable or exercisable for Shares held by the
undersigned except in compliance with the foregoing restrictions.
Notwithstanding the foregoing, the undersigned may transfer any Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock either (i) during the
B-1
undersigned’s lifetime to his or her immediate family or to a trust if the beneficiaries of
such trust are exclusively the undersigned and/or a member or members of his or her immediate
family or (ii) upon death by will or intestacy; provided, however, that prior to any such transfer
each transferee shall execute an agreement substantially identical to this agreement and which
shall be satisfactory to ▇▇▇▇▇▇▇▇▇ & Company Inc., pursuant to which each transferee shall agree to
receive and hold such Common Stock, or securities convertible into or exchangeable or exercisable
for Common Stock, subject to the provisions hereof, and there shall be no further transfer except
in accordance with the provisions hereof. For purposes of this paragraph, “immediate family” shall
mean spouse, lineal descendant, father, mother, brother, sister or domestic partner of the
transferor, whether by law or otherwise, or any grandparent, mother-in-law, father-in-law,
daughter-in-law, brother-in-law, stepchild, grandchild or step-grandchild, uncle, aunt, niece or
nephew of the transferor, and which shall include adoptive relationships.
With respect to the Placement, the undersigned waives any registration rights relating to
registration under the Securities Act of 1933, as amended, of any Shares owned either of record or
beneficially by the undersigned, including any rights to receive notice of the Placement.
This agreement is irrevocable and will be binding on the undersigned and the respective
successors, heirs, personal representatives, and assigns of the undersigned. This agreement shall
be governed by and construed in accordance with the internal laws of the State of New York.
| Printed Name of Holder | ||||
| By: | ||||
| Signature | ||||
| Printed Name of Person Signing | ||||
| (and indicate capacity of person signing if signing as custodian, trustee, or on behalf of an entity) | ||||
B-2
EXHIBIT B-2
FORM OF CYTRX LOCK-UP AGREEMENT
FORM OF CYTRX LOCK-UP AGREEMENT
Jefferies & Company, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: RXi Pharmaceuticals Corporation — Lock-Up Agreement
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares (“Shares”) of the
Common Stock (the “Common Stock”), par value $0.0001 per share, of RXi Pharmaceuticals Corporation
(the “Company”). The Company is proposing a private placement of Common Stock (the “Placement”)
for which you will act as the Placement Agent. The undersigned recognizes that the Placement will
be of benefit to the undersigned and will benefit the Company by, among other things, raising
additional capital for its operations. The undersigned acknowledges that you are relying on the
representations and agreements of the undersigned contained in this letter in carrying out the
Placement and in entering into a placement agency agreement with the Company with respect to the
Placement.
In consideration of the foregoing, the undersigned hereby agrees that the undersigned will
not, without the prior written consent of Jefferies & Company, Inc. (“Jefferies”) (which consent
may be withheld in its sole discretion), directly or indirectly, sell, offer, contract or grant any
option to sell (including without limitation any short sale), pledge, transfer, establish an open
“put equivalent position” within the meaning of Rule 16a-1(h) under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), or otherwise dispose of any Shares, options or warrants to
acquire Shares, or securities exchangeable or exercisable for or convertible into Shares currently
or hereafter owned either of record or beneficially (as defined in Rule 13d-3 under the Exchange
Act ) by the undersigned, or publicly announce an intention to do any of the foregoing, for a
period commencing on the date hereof and continuing through the close of trading on the date which
is thirty (30) days after the date of the Final Prospectus filed the Securities and Exchange
Commission (“SEC”) with respect a re-sale registration statement (the “Registration Statement”) for
the benefit of the purchasers of the Common Stock issued in the Placement (the “Lock-up Period”).
The undersigned also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of Shares or securities convertible
into or exchangeable or exercisable for Shares held by the undersigned except in compliance with
the foregoing restrictions.
The restrictions set forth in the immediately preceding paragraph shall not apply to:
(1) any sale of Shares pursuant to Rule 144 (a “144 Sale”) of the Securities Act of
1933, as amended (the “Securities Act”), subject to the volume limitations and other
requirements of such Rule; provided, however, that such 144 Sale must be made exclusively by
or through Jefferies, as broker; provided further that, if Jefferies is not
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able to identify, within five business days after being notified by the Company of its
intention to make a 144 Sale, a purchaser for such Shares at a price not lower than 10%
below the then-prevailing market price for such Shares, then such 144 Sale may be made by
the undersigned without Jefferies acting as broker beginning after the expiration of such
five business day period. In the event Jefferies acts as broker with respect to a 144
Sale, then Jefferies shall be entitled to a commission with respect to such sale. The
commission charged by Jefferies shall be the lowest commission that it charges comparable
customers for comparable transactions (i.e., on a “most favored nations” basis), which
currently is $0.05 per share;
(2) any sale, transfer or other disposition of Shares by the undersigned to a strategic
partner (e.g., a customer, supplier or joint venture partner) in connection with a licensing
arrangement, corporate partnering transaction or similar strategic transaction;
(3) any sale of Shares in a private transaction to an institutional accredited investor
which takes place after the date that the Placement closes; or
(4) any sale, transfer or other disposition of Shares to the sellers in connection with
an acquisition by the undersigned, directly or indirectly, of the business or assets of
another company which takes place after the date that the Placement closes;
provided, however, that it shall be a condition to the transfer that (A), in the case of any
transfer described in clauses (2) and (3) above, the transferee executes and delivers to
Jefferies, not later than one business day prior to such transfer, a written agreement, in
substantially the form of this agreement and otherwise satisfactory in form and substance to
Jefferies, and (B) if the undersigned is required to file a report under Section 16(a) of the
Exchange Act, reporting a reduction in beneficial ownership of Shares, or securities exchangeable
or exercisable for or convertible into Shares, currently or hereafter owned either of record or
beneficially during the Lock-Up Period, the undersigned shall include a statement in such report to
the effect that, in the case of any transfer pursuant to clause (1) above, such transfer is being
made pursuant to Rule 144 of the Securities Act or, in the case of any transfer pursuant to clause
(2) above, such transfer is being made to a strategic partner in connection with a strategic
licensing arrangement, corporate partnering transaction or similar strategic transaction or, in the
case of a transfer pursuant to clause (4), above, such transfer is being made to the sellers in
connection with an acquisition of a business or assets.
This Lock-Up Agreement shall lapse and become null and void (i) if the Placement shall not
have occurred on or before June 30, 2008, (ii) upon written notice from an authorized officer of
the Company to Jefferies that the Company has determined not to pursue or consummate the Placement
or (iii) if the Registration Statement has not been declared effective by the SEC by September 30,
2008.
This Lock-Up Agreement is irrevocable and will be binding on the undersigned and its
successors and assigns. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York.
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| CYTRX CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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EXHIBIT C
OPINION OF COMPANY COUNSEL
References to the Disclosure Package in this Exhibit C include any supplements thereto
at the Closing Date.
1. The Company is a corporation validly existing and in good standing under the laws of
the State of Delaware, with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Public Filings and to enter into
and perform its obligations under this Agreement.
2. The Company has all necessary corporate power and authority to execute and deliver
the Transaction Documents, to perform its obligations thereunder, to issue the Common Stock
and to consummate the other Transactions.
3. Each of the Engagement Letter and the Placement Agency Agreement has been duly
authorized, executed and delivered by the Company.
4. Each of the Transaction Documents (other than the Placement Agency Agreement and the
Engagement Letter) has been duly authorized, executed and delivered by the Company and
constitutes a valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms.
5. The Company has all necessary power and authority to issue and deliver the shares of
Common Stock; the shares of Common Stock have been duly authorized and, when duly issued and
delivered to holders of the Common Stock, the shares of Common Stock will be duly and
validly issued, fully paid and nonassessable and will be issued in compliance with federal
and state securities laws. None of the shares of Common Stock will be issued in violation
of any preemptive rights, rights of first refusal or other similar rights to subscribe for
or purchase securities of the Company.
6. The execution and delivery of the Transaction Documents by the Company, the
performance by the Company of its obligations thereunder (other than performance by the
Company of its obligations under the indemnification sections of such agreements, as to
which no opinion need be rendered), including the issuance and sale of the Securities (i)
will not result in any violation of the provisions of the charter or by-laws of the Company;
(ii) will not constitute a breach of, or Default under, or result in the creation or
imposition of any security interest, mortgage, pledge, lien, charge, encumbrance or adverse
claim upon any property or assets of the Company, pursuant to any agreement filed by the
Company as an exhibit to the Public Filings; (iii) will not result in any violation of any
federal, Delaware law or, to the best knowledge of such counsel any administrative
regulation or administrative or court decree, applicable to the Company; or (v) will not
require any consent, approval, authorization or other order of, or registration or filing
with, any court or other governmental or regulatory authority or agency, except (i) with
respect to the transactions contemplated by the Securities
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Purchase Agreement as may be required under the Securities Act and the Exchange Act,
(ii) as required by the state securities or “blue sky” laws and (iii) for such consents,
approvals, authorizations, orders, filings or registrations which have been obtained or
made.
7. Assuming the accuracy of the representations and warranties of the Purchasers
contained in the Purchase Agreements and the compliance of such parties with the agreements
set forth herein and therein, it is not necessary, in connection with the issuance and sale
of the Securities, in the manner contemplated by Transaction Documents, to register the
Securities under the Securities Act.
8. The Company is not, and after receipt of payment for the Securities will not be, an
“investment company” within the meaning of Investment Company Act.
9. None of the Securities will be issued in violation of any preemptive rights, rights
of first refusal or other similar rights to subscribe for or purchase securities of the
Company known to such counsel.
10. To the knowledge of such counsel and other then as set forth in the Public Filings,
there are no legal or governmental proceedings pending to which the Company is a party or of
which any property or assets of the Company is subject which is required to be disclosed in
any Public Filings.
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