STOCK REDEMPTION AGREEMENT
Exhibit
10.1
This
Stock Redemption Agreement (“Agreement”) is entered into as
of March 22, 2010 between
RXi Pharmaceuticals Corporation, a corporation incorporated under the laws of Delaware
(“Corporation”) and CytRx Corporation, a corporation incorporated under the laws of Delaware
(“Stockholder”).
Recitals
A. Stockholder is the owner of a portion of the issued and outstanding shares of Common Stock,
$0.0001 par value per share, of the Corporation (the “Common Stock”).
B. Stockholder desires to sell to Corporation and Corporation desires to redeem from
Stockholder the number of shares of Common Stock determined as described herein.
C. The execution, delivery and performance of this Agreement by the parties hereto is a
condition precedent to Stockholder’s agreement to waive its preemptive rights in connection with
the Corporation’s issuance and sale of Common Stock and warrants to purchase shares of Common Stock
(the “Warrants”) pursuant to the Securities Purchase Agreement (the “Securities Purchase
Agreement”) dated the date hereof among the Corporation and certain investors (the “Offering”) and
the Placement Agent Agreement (the “Placement Agent Agreement”) dated the date hereof among the
Corporation and Xxxxxx & Xxxxxxx, LLC (“Xxxxxx”).
Agreement
In consideration of the representations, warranties, covenants, and mutual promises contained
in this Agreement, the parties agree as follows:
Section 1
Purchase of Shares
1.1 Purchase. On the Initial Closing Date (defined below), Stockholder agrees to sell
and transfer to Corporation, and Corporation shall purchase and redeem from Stockholder a number of
shares of Common Stock equal to 25% of the number of shares of Common Stock sold by the Corporation
in the closing of the Offering, rounded down to the nearest whole share (the “Initial Redeemed
Shares”). On each Subsequent Closing Date (defined below), Stockholder agrees to sell and transfer
to Corporation, and Corporation shall redeem from Stockholder 25% of the shares of Common Stock
issued by Corporation upon the exercise of a Warrant, rounded down to the nearest whole share or
such lesser number of shares of Common Stock as are, on such Closing Date, owned by Stockholder
(such shares redeemed on each Subsequent Closing Date, “Subsequent Redeemed Shares” and, together
with the Initial Redeemed Shares, the “Shares”). Nothing in this Agreement shall oblige
Stockholder to continue to own or to acquire any shares of Common Stock at any time, or to sell or
deliver any shares of Common Stock to
Corporation at any Warrant Exercise Data as of which Stockholder
owns no shares of Common Stock,
and nothing in this Agreement shall oblige Corporation to purchase from Stockholder any shares of
Common Stock acquired by Stockholder after the date hereof. The obligation of Corporation to
purchase and of Stockholder to sell shares of Common Stock pursuant to this Agreement shall
terminate on the date that Stockholder no longer owns any shares of Common Stock that it owns on
the date hereof.
1.2 Conveyance of Title. Stockholder agrees to convey title to Stockholder’s redeemed
Shares by the delivery of the stock certificates therefor at each Closing (defined below) duly
endorsed for transfer to Corporation or accompanied by duly executed stock powers endorsed in
blank.
Section 2
Consideration to be Paid to Stockholder
2.1 Purchase Price for Shares. The purchase price per Share to be paid to Stockholder
at the Initial Closing is the Per Share “Proceeds, before expenses, to us” as shown on the
Corporation’s prospectus supplement related to the Offering, as filed with the Securities and
Exchange Commission (such price per Share multiplied by the number of Initial Redeemed Shares is
hereinafter referred to as the “Initial Redemption Proceeds”). The purchase price per Share to be
paid to Stockholder at each Subsequent Closing is the per share exercise price of the Warrants
(such per share price multiplied by the number of Subsequent Redeemed Shares at each Subsequent
Closing is hereinafter referred to as the “Subsequent Redemption Proceeds”).
2.2 Payment of Purchase Price. At each Closing (as defined below), Corporation shall
pay to Stockholder the Initial Redemption Proceeds or the Subsequent Redemption Proceeds due upon
such Closing, as applicable, by wire transfer of immediately available federal funds.
Section 3
Representations and Warranties of Stockholder
Stockholder represents and warrants to Corporation as follows as of each Closing Date:
3.1 Ownership. Stockholder is the record and beneficial owner and holder of the
Shares, free and clear of all security interests, liens, claims, proxies, options, charges or
pledges of any kind created by Stockholder. The sale and delivery of the shares of the Shares to
the Corporation pursuant to the terms hereof will vest in the holders thereof legal and valid title
to such Shares, free and clear of any security interests, liens, claims, proxies, options, charges
or pledges of any kind.
3.2 Authorization. Stockholder represents that it is duly formed, validly existing
and in good standing under the laws of its jurisdiction of organization or formation, and has all
corporate, limited liability company, partnership or trust (as the case may be) power and
2
authority
to enter into this Agreement and instruments referred to herein to which it is a party and to
consummate the transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement, and the consummation by Stockholder of the transactions contemplated
hereby, have been duly authorized by all necessary action on the part of Stockholder. This
Agreement has been duly executed and delivered by Stockholder and such agreement constitutes a
valid and binding obligation of Stockholder enforceable against it in accordance with its terms.
3.3 Consent of Third Parties; Violations. Neither the execution, delivery or
performance of this Agreement by Stockholder, nor the consummation by it of the obligations and
transactions contemplated hereby requires any consent of, authorization by, exemption from, filing
with or notice to any governmental entity or any other entity or person, other than filings
required to be made with the Securities and Exchange Commission in connection with the execution of
this Agreement and each Closing. Neither the execution and delivery of this Agreement by
Stockholder, the performance by Stockholder of its obligations hereunder nor the consummation by
Stockholder of the transactions contemplated hereby will (i) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default under, or conflict with any
provisions of the organizational documents of Stockholder or (ii) violate, or require any consent,
approval, or notice under any provision of any judgment, order or decree or any federal, state,
local or foreign statute, law, ordinance, rule, regulation, order, judgment, decree or legal
requirement applicable to Stockholder.
3.4 Sophistication; Release. Stockholder, by reason of the business and financial
experience of its management, has the capacity to protect its own interests in connection with the
transactions contemplated by this Agreement and has had the opportunity to consult counsel or other
advisors with respect thereto. Stockholder is not relying on any representation or warranty of the
Corporation in making its decision to enter into this Agreement or to sell the Shares. Stockholder
is experienced, sophisticated and knowledgeable in trading securities of public companies and
understands the disadvantages to which Stockholder is subject on account of the disparity of
information as between the Corporation and Stockholder. Stockholder has had the opportunity to
independently investigate and evaluate the value of the Shares and the financial condition and
affairs of the Corporation without reliance upon the Corporation. Based upon its independent
analysis, Stockholder has reached its own business decision to enter into the transactions
contemplated by this Agreement. Stockholder expressly releases the Corporation, its affiliates and
its shareholders from any and all liabilities arising from any such person’s failure to disclose,
or Stockholder’s inability to review, any such information and Stockholder agrees to make no claim
against the Corporation, its affiliates or its shareholders in respect thereof.
3.5 Brokers. There is no broker, investment banker, financial advisor, finder or
other person which has been retained by or is authorized to act on behalf of Stockholder who might
be entitled to any fee or commission for which the Corporation will be liable in connection with
the execution of this Agreement and the consummation of the transactions contemplated hereby.
3
Section 4
Representations and Warranties of Corporation
Corporation represents and warrants to Stockholder as follows:
4.1 Corporate Status. Corporation is duly organized, validly existing, and in good
standing under the laws of the state of Delaware.
4.2 Authorization. This Agreement, the purchase of the Shares hereunder, the payment
of the Initial Redemption Proceeds and the Subsequent Redemption Proceeds, as applicable, due on
such Closing Date and the consummation of the other transactions to be performed hereunder by
Corporation have been approved by all necessary corporate action on the part of the Corporation,
including approval by the Board of Directors of Corporation and all actions required to be
performed by Corporation by any applicable law or otherwise with respect to such transactions have
been appropriately authorized and accomplished.
4.3 Consent of Third Parties. Neither the execution, delivery or performance of this
Agreement by Corporation, nor the consummation by it of the obligations and transactions
contemplated hereby requires any consent of, authorization by, exemption from, filing with or
notice to any governmental entity or any other entity or person, other than filings required to be
made with the Securities and Exchange Commission in connection with the execution of this Agreement
and each Closing. Neither the execution and delivery of this Agreement by Corporation, the
performance by Corporation of its obligations hereunder nor the consummation by Corporation of the
transactions contemplated hereby will (i) result in a violation or breach of, or constitute (with
or without notice or lapse of time or both) a default under, or conflict with any provisions of the
organizational documents of Corporation or (ii) violate, or require any consent, approval, or
notice under any provision of any judgment, order or decree or any federal, state, local or foreign
statute, law, ordinance, rule, regulation, order, judgment, decree or legal requirement applicable
to Corporation.
Section 5
Covenants of Stockholder
Unless Corporation waives such performance in writing, Stockholder covenants as follows:
5.1 Conveyance of Title to Shares At each Closing, Stockholder will convey title to
the Shares being sold and transferred at such Closing to Corporation free and clear of any security
interests, liens, claims, proxies, options, charges or pledges of any kind.
5.2 Professional Fees. All professional fees including, without limitation, all
attorney and accountant fees, incurred by Stockholder as a result of the negotiation and
preparation of this Agreement and the consummation of the transactions contemplated hereby will be
paid by Stockholder.
4
Section 6
Conditions Precedent to Obligations of Corporation
The obligations of Corporation to be performed hereunder are subject to the satisfaction (or
waiver by Corporation) on or before each Closing of each of the following conditions:
6.1 Securities Purchase Agreement. The transactions contemplated by the Securities
Purchase Agreement and Placement Agent Agreement will have been consummated.
6.2 Delivery of Redeemed Shares. Stockholder shall have delivered, or caused to be
delivered, to the Corporation the certificates for the Shares being sold at transferred at such
Closing duly endorsed for transfer to Corporation or accompanied by duly executed stock powers
endorsed in blank.
6.3 Representations and Warranties. The representations and warranties of Stockholder
contained in this Agreement shall be true and correct in all material respects on and as of each
Closing with the same effect as though such representations and warranties had been made on and as
of such Closing.
Section 7
Conditions to Obligations of Stockholder
The obligations of Stockholder to be performed hereunder are subject to the satisfaction (or
waiver by Stockholder) on or before each Closing of each of the following conditions:
7.1 Payment of Purchase Price. Corporation shall have paid the Closing Amount due at
such Closing in the amount and manner specified herein.
Section 8
Closing
8.1 Time and Place The closing of the redemption of the Initial Redeemed Shares
hereunder (“Initial Closing”) will take place on the first business day following the closing of
the transactions contemplated by the Securities Purchase Agreement (the “Initial Closing Date”).
Each closing of the redemption of Subsequent Redeemed Shares hereunder (each a “Subsequent
Closing”, the Initial Closing and each Subsequent Closing, each a “Closing”) shall take place on
the first business day following an exercise of a Warrant, or as promptly thereafter as practicable
(the “Subsequent Closing Date”, the Initial Closing Date and each Subsequent Closing Date, each a
“Closing Date”).
5
8.2 Obligations of Stockholder. At each Closing, Stockholder will deliver, or cause
to be delivered, to Corporation the certificates for the Shares to be redeemed at such Closing duly
endorsed for transfer to Corporation or accompanied by duly executed stock powers endorsed in
blank.
8.3 Obligations of Corporation. At each Closing, Corporation will pay the Initial
Redemption Proceeds or the Subsequent Redemption Proceeds, as applicable, due at such closing in
the manner provided herein. At each Closing, Corporation will also instruct its transfer agent to
promptly issue a new certificate to Stockholder for the balance of the shares included on the
certificate delivered to Corporation which have not been transferred as part of such Closing.
8.4 Additional Actions. Each of the parties, individually, or in their corporate
capacities, hereby agrees to execute and deliver all such additional documents and take all actions
necessary or appropriate to consummate any and all of the transactions contemplated hereby.
Section 9
Miscellaneous Provisions
10.1 Notices. Any notices required or permitted hereby will be deemed given when sent
by one party to the other, in writing by registered or certified U.S. mail, postage prepaid, which
in the case of Stockholder may be addressed to Stockholder at the address set forth in
Corporation’s records and in the case of Corporation, as follows:
| Corporation: | RXi Pharmaceutical Corporation | |||
| 00 Xxxxxxxx Xxxxxx | ||||
| Xxxxxxxxx, XX 00000 | ||||
| Attn: President | ||||
| With a copy (which will not constitute notice) to: |
Ropes & Xxxx LLP | |||
| Xxx Xxxxxxxxxxxxx Xxxxx | ||||
| Xxxxxx, XX 00000-0000 | ||||
| Attn: Xxxx Xxxxxxxxxx | ||||
| Facsimile: (000) 000-0000 |
The above addresses may be changed from time to time by giving notice thereof in the manner
provided herein.
10.2 Successors and Assigns. None of the parties may assign their rights or delegate
their duties hereunder. This Agreement will be binding upon and inure to the benefit of the heirs,
executors, administrators, and successors of the parties hereto.
6
10.3 Integrated Agreement. This Agreement constitutes the complete and exclusive
agreement of the parties. The terms of this Agreement may not be modified except in a writing
signed by all of the parties.
10.4 Governing Law. The rights and obligations of the parties hereunder and the
interpretation of this Agreement are governed by the laws of the Commonwealth of Massachusetts
(other than those relating to conflicts of laws). All disputes arising under this Agreement will
be resolved by the court having proper jurisdiction in the Commonwealth of Massachusetts. The
parties consent to submit themselves to the jurisdiction of such courts and agree that service of
process on them in any such dispute may be effected by the means by which notices are to be given
to them under this Agreement.
10.5 Counterparts. This Agreement may be executed in two or more counterparts, each
of which is deemed to be an original, and all of which taken together constitute one and the same
instrument.
10.6 Waivers. Waiver of the benefit of any provision hereof must be in writing to be
effective. The waiver by any party of a breach of any provision of this Agreement may not be
construed as a waiver of any subsequent breach. No action taken pursuant to this Agreement,
including without limitation, any investigation by or on behalf of any party, constitutes a waiver
by the party taking the action of compliance with any representations, warranties, covenants, or
other obligations contained herein.
10.7 Interpretation. Except where otherwise required by the context, words of any
gender used herein will be deemed to include any and all genders and the singular and plural are
interchangeable.
10.9 Joint Preparation. This Agreement was prepared jointly by the parties and any
uncertainty or ambiguity existing herein may not be interpreted against either party.
10.10 Termination. This Agreement may be terminated by either party hereto upon the
termination prior to the Initial Closing of the Securities Purchase Agreement by delivery of
written notice thereof to the non-terminating party. Upon any such termination, this Agreement
shall thereafter be null and void and cease to have any force or effect whatsoever, and none of the
parties hereto shall have any liability to any other party hereto.
7
To evidence their consent to this Agreement, the parties executed this instrument on the dates
set opposite their signatures below.
Corporation:
| RXi Pharmaceutical Corporation |
||||
| By: | /s/ Xxxx X. Xxxxxxx | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Chief Executive Officer | |||
Stockholder:
| CytRx Corporation |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxxxx | |||
| Title: | President and Chief Executive Officer | |||
