DBR DRAFT 4/6/16

 

EXCHANGE AGREEMENT

 

___________________ (the “Holder) enters into this Agreement (the “Agreement”)
with RespireRx Pharmaceuticals Inc. (formerly known as Cortex Pharmaceuticals,
Inc.), a Delaware corporation (the “Company”) on [______], 2016, whereby Holder
will exchange warrants and cash for shares of common stock of the Company and
new warrants (the “Exchange”).

 

RECITALS

 

WHEREAS, the Holder is the holder of Warrant Number ____ (the “Existing
Warrant”) to purchase up to ________ shares of the Company’s Common Stock (the
“Common Stock”);

 

WHEREAS, the Holder wishes to exchange the Existing Warrant and pay cash to
obtain _______________ shares of Common Stock and a new warrant to purchase up
to _______________ shares of Common Stock (the “New Warrant”), with such new
warrant to be substantially in the form set out in Exhibit A hereto;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and on and subject to the
terms and conditions set forth in this Agreement, the parties hereto agree as
follows:

 

1. The Exchange.

 

(a) Exchange of Existing Warrant and Cash for Shares and New Warrant. At the
Closing (as defined herein), the Holder agrees to exchange the Existing Warrant
and deliver and transfer all right, title and interest in the Existing Warrant
to the Company and to deliver to the Company by wire transfer of immediately
available funds in accordance with the Company’s instructions cash in an amount
of $___________ (the “Cash Amount”), and in exchange therefor, the Company
hereby agrees to issue the Holder ____________ shares of Common Stock (the
“Shares”) and the New Warrant. References to an “Exhibit” or “Schedule” are
references to an Exhibit or Schedule attached to this Agreement unless otherwise
specified. References to a “Section” are references to a Section of this
Agreement unless otherwise specified.

 

(b) Closing and Delivery. The Exchange shall take place at a closing (the
“Closing”) to be held at such place and time as the Company and the Holder shall
mutually determine (the “Closing Date”). At the Closing, the Holder shall assign
and transfer all right, title and interest in and to its Existing Warrant to the
Company and the Company will deliver to the Holder the Shares and the New
Warrant registered in such Holder’s name, against receipt by the Company of the
Holder’s Existing Warrant and the Cash Amount for the account of the Company by
wire transfer of immediately available funds in accordance with the Company’s
instructions. The cash proceeds of the Exchange shall be used by the Company in
connection with research and development, general and administrative purposes
and working capital. The Closing shall take place no later than June 30, 2015.

 

 

 

 

(c) Acceptance by the Company. This Agreement shall be deemed to be accepted by
the Company only when it is signed by a duly authorized officer of the Company
and delivered to the Holder at the Closing referred to in Section 1(b) hereof.

 

2. Covenants, Representations and Warranties of the Company. The Company hereby
covenants as follows and, except as set forth on Schedule I hereto, makes the
following representations and warranties, each of which is and shall be true and
correct on the date hereof and, in all material respects, at the Closing Date,
to the Holder, and all such covenants, representations and warranties shall
survive the Closing.

 

(a) Due Incorporation; Qualification. The Company (i) is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization; (ii) has the power and authority to own, lease and
operate its properties and carry on its business as now conducted; and (iii) is
duly qualified, licensed to do business and in good standing as a foreign
corporation in each jurisdiction where such qualification or license is required
by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing could not reasonably be expected to have a
material adverse effect on the Company and its subsidiaries taken as a whole.

 

(b) Authority; Enforceability. The execution, delivery and performance by the
Company of this Agreement and the New Warrant (each a “Transaction Document” and
collectively, the “Transaction Documents”) and the consummation of the Exchange
(i) are within the corporate power of the Company and (ii) have been duly
authorized by all necessary corporate action on the part of the Company. Each
Transaction Document executed by the Company has been duly executed and
delivered by the Company and constitutes a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except as limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the enforcement of creditors’ rights
generally and general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

 

(c) Non-Contravention. The execution and delivery by the Company of the
Transaction Documents executed by the Company and the performance and
consummation of the transactions contemplated thereby do not (i) violate the
Company’s Certificate of Incorporation, Bylaws or other formation or charter
documents, as applicable (as amended, the “Charter Documents”), (ii) violate any
material judgment, order, writ, decree, statute, rule or regulation applicable
to the Company; (iii) result in the breach of any material provision of or in
the acceleration of, or entitle any other person to accelerate (whether after
the giving of notice or lapse of time or both), any material mortgage,
indenture, agreement, instrument or contract to which the Company is a party or
by which it is bound; or (iv) result in the creation or imposition of any lien
or encumbrance upon any property, asset or revenue of the Company under any
material agreement or instrument to which the Company is bound.

 

(d) Litigation. No actions (including, without limitation, derivative actions),
suits, proceedings or investigations are pending or, to the knowledge of the
Company, threatened in writing against the Company or the Company’s
subsidiaries, if any, at law or in equity in any court or before any other
governmental authority.

 

(e) Title. The Company and the Company’s subsidiaries own and have good and
marketable title in fee simple absolute to, or a valid leasehold in, all their
respective real properties, if any, and good title to their other respective
assets and properties. Such assets and properties are subject to no liens or
encumbrances.

 

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(f) Intellectual Property. The Company and the Company’s subsidiaries own or
possess sufficient legal rights to all patents, trademarks, service marks, trade
names, copyrights, trade secrets, licenses, information, processes and other
intellectual property rights necessary for its business as now conducted and as
proposed to be conducted, without any conflict with, or infringement of, the
rights of others. Since March 22, 2013, each employee of the Company has
executed, or will execute, a confidential information and invention assignment
agreement in favor of the Company. Since March 22, 2013, the Company has entered
into, or intends to enter into, an agreement containing appropriate
confidentiality and invention assignment provisions in favor of the Company with
each consultant to the Company that has or will have access to the Company’s
intellectual property.

 

(g) Debt for Borrowed Money. As of the date of this Agreement, the Company does
not have any outstanding debt for borrowed money, other than as disclosed on
Schedule I.

 

(h) Exchange. The terms of the Exchange are the result of negotiations among the
parties and their agents.

 

3. Covenants, Representations and Warranties of the Holder. The Holder hereby
covenants as follows and makes the following representations and warranties,
each of which is and shall be true and correct on the date hereof and at the
Closing, to the Company, and all such covenants, representations and warranties
shall survive the Closing.

 

(a) Binding Obligation. Holder has full legal capacity, power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement has been duly executed and delivered by the Holder and
constitutes a legal, valid and binding obligation of the Holder, enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
enforcement of creditors’ rights generally and general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

 

(b) Title to the Existing Warrant. The Holder is, and on the date of the Closing
will be, the sole legal and beneficial owner of the Existing Warrant free and
clear of any mortgage, lien, pledge, charge, security interest, encumbrance,
title retention agreement, option, equity or other adverse claim thereto created
by the Holder.

 

(c) Securities Law Compliance. The Holder has been advised that the Shares, New
Warrant and the Common Stock underlying the New Warrant have not been registered
under the Securities Act of 1933, as amended (the “Securities Act”), or any
state securities laws, and therefore, cannot be resold unless they are
registered under the Securities Act and applicable state securities laws unless
an applicable exemption from such registration requirements is available. The
Holder has not been formed solely for the purpose of making this investment and
is entering into this Agreement and acquiring the Shares and New Warrant for its
own account for investment, not as a nominee or agent, and not with a view to,
or for resale in connection with, the distribution of thereof. The Holder has no
present intention of selling, granting any participation in, or otherwise
distributing the same and Holder does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer, grant any
participation in or otherwise distribute all or any part of the Shares or New
Warrant. The Holder acknowledges that the Shares will not be freely transferable
upon receipt. The Holder has such knowledge and experience in financial and
business matters that the Holder is capable of evaluating the merits and risks
of such investment, is able to incur a complete loss of such investment without
impairing the Holder’s financial condition and is able to bear the economic risk
of such investment for an indefinite period of time. The Holder is an accredited
investor as such term is defined in Rule 501 of Regulation D under the
Securities Act.

 

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(d) Adequate Information; No Reliance. The Holder acknowledges and agrees that
(a) the Holder has been furnished with all materials the Holder considers
relevant to making an investment decision to enter into this Agreement and
effectuate the Exchange and has had the opportunity to review (and has carefully
reviewed) (i) the Company’s filings and submissions with the Securities and
Exchange Commission (the “SEC”), including, without limitation, all information
filed or furnished pursuant to the United States Securities and Exchange Act of
1934, as amended (collectively, the “Public Filings”), and (ii) this Agreement,
(b) the Holder has had an opportunity to submit questions to the Company
concerning the Company, its business, operations, financial performance,
financial condition and prospects, and the terms and conditions of the Exchange,
and has all information that it considers necessary in making an informed
investment decision and to verify the accuracy of the information set forth in
the Public Filings and this Agreement, (c) the Holder has had the opportunity to
consult with accounting, tax, financial and legal advisors of its choosing to be
able to evaluate the risks involved in the Exchange and to make an informed
investment decision with respect to such Exchange, (d) the Holder is not
relying, and has not relied, upon any statement, advice (whether accounting,
tax, financial, legal or other), representation or warranty made by the Company
or any of its affiliates or representatives or any other entity or person,
except for (A) the Public Filings, (B) this Agreement and (C) the
representations and warranties made by the Company in this Agreement, and (e) no
statement or written material contrary to the Public Filings or this Agreement
has been made or given to the Holder by or on behalf of the Company.

 

(e) No Publicity. The Holder acknowledges that it has a pre-existing
relationship with the Company and that it has not approached the Company about
this Exchange as the result of any public offering. Neither the Company nor any
other person has approached the Holder about this Exchange by means of any form
of general solicitation or advertising.

 

(f) Confidentiality. The Holder has complied with its confidentiality
undertaking as acknowledged by an email from a representative of the Company to
the Holder on April __, 2016.

 

(g) Source of Funds. The Holder represents that, as to the source of funds
(“Source”) to be used by the Holder to pay the Cash Amount, the Source does not
include assets of any employee benefit plan, other than a plan exempt from the
coverage of the Employee Retirement Income Security Act of 1974, as amended from
time to time, and the rules and regulations promulgated thereunder from time to
time in effect.

 

(h) Further Action. The Holder agrees that it will, upon request, execute and
deliver any additional documents deemed by the Company to be necessary or
desirable to complete the Exchange.

 

(i) Exchange. The terms of the Exchange are the result of negotiations among the
parties and their agents.

 

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4. Conditions to Closing of the Holder. The Holder’s obligations at the Closing
are subject to the fulfillment, on or prior to the applicable Closing Date, of
all of the following conditions:

 

(a) Representations and Warranties. The representations and warranties made by
the Company in Section 2 hereof, in each case except as modified by Schedule I,
shall have been true and correct when made, and shall be true and correct in all
material respects on the Closing Date.

 

(b) Governmental Approvals and Filings. Except for any notices required or
permitted to be filed after the applicable Closing Date with certain federal and
state securities commissions, the Company shall have obtained all governmental
approvals required in connection with the lawful sale and issuance of the Shares
and the New Warrant.

 

(c) Legal Requirements. On the Closing Date, the Exchange, including the sale
and issuance by the Company, and the purchase by the Holder, of the Shares and
the New Warrant shall be legally permitted by all laws and regulations to which
the Holder and the Company are subject.

 

(d) Transaction Documents. The Company shall have duly executed and delivered to
the Holder the following documents: (i) this Agreement and (ii) the Shares and
the New Warrant.

 

5. Conditions to Obligations of the Company. The Company’s obligation to
effectuate the Exchange and to issue and sell the Shares and the New Warrant to
the Holder at the Closing, is subject to the fulfillment, on or prior to the
applicable Closing Date, of all of the following conditions:

 

(a) Representations and Warranties. The representations and warranties made by
the Holder in Section 3 hereof shall be true and correct when made, and shall be
true and correct on the Closing Date.

 

(b) Legal Requirements. On the Closing Date, the Exchange, including the sale
and issuance by the Company, and the purchase by the Holder, of the Shares and
the New Warrant shall be legally permitted by all laws and regulations to which
the Holder and the Company are subject.

 

(c) Transaction Documents. The Holder shall have delivered to the Company the
Existing Warrant and the Cash Amount and shall have duly executed and delivered
to the Company (i) this Agreement and (ii) an acceptance by the Holder of the
Shares and the New Warrant.

 

6. Miscellaneous.

 

(a) Waivers; Amendments. Any provision of this Agreement may be amended, waived
or modified only upon the written consent of the Company and the Holder.

 

(b) Governing Law. This Agreement and all actions arising out of or in
connection with this Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflicts of law
provisions of the State of New York or of any other state.

 

(c) Survival. The representations, warranties, covenants and agreements made
herein shall survive the execution and delivery of this Agreement.

 

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(d) Successors and Assigns. Subject to the restrictions on transfer described in
Section 6(e) below, the rights and obligations of the Company and the Holder
shall be binding upon and benefit the successors, assigns, heirs, administrators
and transferees of the parties.

 

(e) Assignment. The rights, interests or obligations hereunder and under the New
Warrant may not be assigned, by operation of law or otherwise, in whole or in
part, by the Company without the prior written consent of the Holder. The
rights, interests or obligations hereunder and under the New Warrant may not be
assigned by the Holder without the prior written consent of the Company.

 

(f) Entire Agreement. This Agreement together with the other Transaction
Documents constitute and contain the entire agreement and understanding between
the Company and the Holder with respect to the subject matter hereof and
supersede any and all prior and contemporaneous agreements, negotiations,
correspondence, understandings and communications between or among the parties
or any of their agents, representatives or affiliates, whether written or oral,
respecting the subject matter hereof.

 

(g) Notices. All notices, demands, consents, or other communications hereunder
shall in writing and faxed, mailed or delivered to each party as follows: (i) if
to the Holder, at the Holder’s address or facsimile number set forth on the
signature page hereto, or at such other address as the Holder shall have
furnished the Company in writing in accordance with this paragraph, or (ii) if
to the Company, at such address or fax number set forth on the signature page
hereto, or at such other address or facsimile number as the Company shall have
furnished to the Holder in writing in accordance with this paragraph. All such
communications will be deemed effectively given the earlier of (i) when
received, (ii) when delivered personally, (iii) one business day after being
delivered by facsimile (with receipt of appropriate confirmation), (iv) one
business day after being deposited with an overnight courier service of
recognized standing, or (v) four days after being deposited in the U.S. mail,
first class with postage prepaid.

 

(h) Expenses. Each of the Company and the Holder will bear their own respective
expenses associated with the negotiation, execution and delivery of this
Agreement and the consummation of the Exchange.

 

(i) Only Company Liable. In no event shall any stockholder, officer, director or
employee of the Company be liable for any amounts due or payable pursuant to any
Transaction Document.

 

(j) Severability. If any provision of this Agreement shall be judicially
determined to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

 

(k) Headings. Headings used in this Agreement have been included for convenience
and ease of reference only, and will not in any manner influence the
construction or interpretation of any provision of this Agreement. Neither
party, nor its respective counsel, shall be deemed the drafter of this Agreement
for purposes of construing the provisions of this Agreement, and all language in
all parts of this Agreement shall be construed in accordance with its fair
meaning, and not strictly for or against either party.

 

(l) Counterparts. This Agreement may be executed in one or more counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same agreement. Facsimile copies of signed signature
pages will be deemed binding originals.

 

(m) Termination. The Company may terminate this Agreement if there has occurred
any breach or withdrawal by the Holder of any covenant, representation or
warranty set forth in Section 3. The Holder may terminate this Agreement if
there has occurred any breach or withdrawal by the Company of any covenant,
representation or warranty set forth in Section 2.

 

(Signature Page Follows)

 

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The parties have caused this Agreement to be duly executed and delivered by
their proper and duly authorized officers as of the date and year first written
above.

 

COMPANY:

 

RESPIRERX PHARMACEUTICALS INC.

a Delaware corporation

 

By:     Name:     Title:    

 

Address for notices:

RespireRx Pharmaceuticals Inc.

Attention: ______________________

126 Valley Road, Suite C

Glen Rock, NJ 07452

(phone): _________________

(fax): ____________________

 

 

 

 

HOLDER:

 

[HOLDER NAME (IF ENTITY)]

 

By:   (signature) Print Name:   Print Title:       Address for notices:      
                                                     
                                                      (phone):
                                                     (fax):
                                                    

 

 

 

 

SCHEDULE I

 

EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES

 

Convertible Notes

 

The Company is obligated under Convertible Notes issued from November 5, 2014
through and including February 2, 2015, aggregating principal amounts totaling
$579,500 and bearing interest of 10% per annum and maturing on September 15,
2016.

 

Notes

 

The Company is obligated under two demand promissory notes of $52,600 each for a
total of $105,200 to James S. Manuso, the Company’s President and CEO and Vice
Chairman and Arnold S. Lippa, the Company’s Chief Scientific Officer and
Chairman. Each note is payable on demand and bears interest at a rate equal to
10% per annum, with any accrued but unpaid interest added to principal at the
end of each year that the balance is outstanding. Each note grants a security
interest in the assets of the Company, subject to certain conditions as set
forth therein. These demand promissory notes are described in a Form 8-K filed
with the Securities and Exchange Commission on February 3, 2016.

 

Samyang Documents

 

Permitted liens include the liens granted to Samyang Optics Co., Ltd. (now known
as SY Corporation, Co., Ltd.) (“Samyang”) and its successors and assigns under
that certain Securities Purchase Agreement, dated as of June 25, 2012, between
the Company and Samyang and any documents delivered in connection therewith (as
amended, restated or otherwise modified from time to time, collectively, the
“Samyang Documents”). The indebtedness pursuant to the Samyang Documents and all
transactions contemplated in connection with the Samyang Documents are permitted
hereunder. The Company is in default of certain of the Samyang Documents, as
more fully set forth in the Company’s filings with the U.S. Securities and
Exchange Commission.

 

Trade Accounts

 

From time to time, the Company has obligations in respect of trade accounts
payable.

 

The Company has certain obligations in respect of claims by one prior employee
and certain prior advisors. Payments with respect to certain of those
obligations are due at the end of December 2015.

 

 

 

 

EXHIBIT A

 

FORM OF NEW WARRANT

 

NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES LAW, AND NO INTEREST HEREIN OR THEREIN MAY BE SOLD, DISTRIBUTED,
ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS COVERING ANY SUCH TRANSACTION, (B) THE COMPANY RECEIVES AN OPINION OF
COUNSEL FOR THE HOLDER OF SUCH SECURITIES (CONCURRED IN BY COUNSEL FOR THE
COMPANY) THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THE COMPANY
OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.

 

WARRANT TO PURCHASE COMMON STOCK

 

RESPIRERX pharmaceuticals inc.

 

Warrant Number: [_______] Initial Exercise Date: [     ], 2016

 

THIS WARRANT TO PURCHASE COMMON STOCK (the “Warrant”) certifies that, for value
received, [______________] or his/her or its permitted assigns (the “Holder”) is
entitled, upon the terms and conditions hereof, and subject to the limitations
on exercise hereinafter set forth, at any time on or after the date hereof (the
“Initial Exercise Date”) and on or prior to 5:00 p.m. New York time on September
30, 2020 (the “Termination Date”) but not thereafter, to subscribe for and
purchase from RespireRx Pharmaceuticals Inc. (formerly known as Cortex
Pharmaceuticals, Inc.), a Delaware corporation (the “Company”), up to [__the
number of shares of common stock purchased in the Common Stock and Warrant
Offering__] shares (as subject to adjustment hereunder, the “Warrant Shares”) of
Common Stock. The purchase price of each share of Common Stock under this
Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1. Definitions. Capitalized terms used and not otherwise defined herein
shall have the meanings set forth in (i) that Certain Exchange Agreement , dated
as of [______], 2016, or (ii) that certain Common Stock and Warrant Purchase
Agreement, dated as of [_____], 2015 (the “Purchase Agreement”), among the
Company and the Investors, as applicable. [In the event of conflict in the
definitions of any capitalized terms, the definition it the Exchange Agreement
shall control.] This is one of the “New Warrants” referred to in the Exchange
Agreement.

 

Section 2. Exercise.

 

a) Exercise of Warrant. Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on any Business
Day (as defined below) on or after the Initial Exercise Date and on or before
the Termination Date by delivery to the Company (or such other office or agency
of the Company as it may designate by notice in writing to the registered Holder
at the address of the Holder appearing on the books of the Company) of a duly
completed and executed facsimile copy of the Notice of Exercise form annexed
hereto (the “Notice of Exercise”). Within three (3) Business Days (as defined
below) following the date of exercise as aforesaid, the Holder shall deliver the
aggregate Exercise Price (as defined below) for the shares specified in the
applicable Notice of Exercise by wire transfer in immediately available funds or
cashier’s check drawn on a United States bank in immediately available funds. A
“Business Day” means any day other than a Saturday or Sunday or any day that
national commercial banks in New York City, New York are authorized or required
to close or any day that the NADSAQ stock markets or any other nationally
recognized stock markets are closed. Notwithstanding anything herein to the
contrary, the Holder shall not be required to physically surrender this Warrant
to the Company until the Holder has purchased all of the Warrant Shares
available hereunder and the Warrant has been exercised in full, in which case,
the Holder shall surrender this Warrant to the Company for cancellation within
three (3) Business Days of the date the final Notice of Exercise is delivered to
the Company. Partial exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Shares available hereunder shall have the
effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased. The Company, either directly or through its representative, shall
maintain, or cause to be maintained, records showing the number of Warrant
Shares purchased and the date of such purchases, which records shall be deemed
to be accurate absent manifest error. The Company shall deliver any objection to
any Notice of Exercise within two (2) Business Days of actual receipt of such
notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge
and agree that, by reason of the provisions of this paragraph, following the
purchase of a portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be less than the
amount stated on the face hereof.

 

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b) Exercise Price. The exercise price per share of the Common Stock under this
Warrant initially shall be $[ ] per share, subject to adjustment hereunder
(including, without limitation, under Sections 2 and 3 hereof) (as adjusted, the
“Exercise Price”).

 

c) Cashless Exercise. This Warrant may be exercised at any time otherwise
permitted by means of a “cashless exercise” in which the Holder shall be
entitled to receive a certificate for the number of Warrant Shares equal to the
quotient obtained by the following formula:

 

(A-B)*(X)

(A)

 

Where:

 

(A) = the Closing Price on the Trading Day immediately preceding the date of
such election (“Trading Day” means any Business Day, or, if the Common Stock of
the Company is traded on an exchange, the OTC BB or other quotation system, then
any Business Day on which such exchange, the OTC Bulletin Board or quotation
system is open for trading the Common Stock of the Company);

 

(B) = the Exercise Price of this Warrant, as adjusted; and

 

(X) = the number of Warrant Shares issuable upon exercise of this Warrant in
accordance with the terms of this Warrant by means of a cash exercise rather
than a cashless exercise.

 

As used herein, “Closing Price”, shall mean the first of the following clauses
that applies: (1) if, at the time of any such calculation, the Common Stock is
listed or quoted on the American Stock Exchange, or the New York Stock Exchange,
or the NASDAQ Market, the NASDAQ Capital Market or the Archipelago Exchange, the
Closing Price shall be the closing or last sale price reported for the last
business day immediately preceding the date of any such calculation; (2) if, at
the time of any such calculation, the Common Stock is quoted on the OTC Bulletin
Board or listed in the “Pink Sheets” published by the National Quotation Bureau
Inc. or a similar agency or organization succeeding to its function or reporting
prices, the Closing Price shall be the average of the closing prices reported
for the last five (5) days during which the Common Stock actually traded and for
which a closing price is available immediately preceding the date of any such
calculation, or (3) in all other cases, the Closing Price of a share of Common
Stock shall be the price determined by an independent appraiser selected in good
faith by the Holder and reasonably acceptable to the Company.

 

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d) Mechanics of Exercise.

                                                                                                  

i. Delivery of Certificates Upon Exercise. Certificates for shares issuable upon
the exercise hereof shall be transmitted by the transfer agent of the Company to
the Holder by crediting the account of the Holder’s broker with the Depository
Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if
the Company is a participant in such system and such shares are eligible for
legend removal, and otherwise by physical delivery to the address specified by
the Holder in the Notice of Exercise on the date that is no more than five (5)
Business Days after the latest of (A) the delivery to the Company of the Notice
of Exercise, (B) surrender of this Warrant (if required), and (C) payment of the
aggregate Exercise Price as set forth above (such date, the “Warrant Share
Delivery Date”). The Warrant Shares shall be deemed to have been issued, and
Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the latter
of the date the Warrant has been exercised and payment to the Company of the
Exercise Price has been made in good funds by either certified check, wire
transfer or other similar payment method and all taxes required to be paid by
the Holder, if any, pursuant to Section 2(d)(v) prior to the issuance of such
shares, having been paid.

                                                                                              

ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been
exercised in part, the Company shall, at the request of a Holder and upon
surrender of this Warrant, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares
called for by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.

                                                                                               

iii. Rescission Rights. If the Company fails to transmit, or to cause the
transfer agent of the Company to transmit, to the Holder a certificate or the
certificates representing the Warrant Shares pursuant to Section 2(d)(i) by the
Warrant Share Delivery Date, then the Holder will have the right to rescind such
exercise.

 

iv. No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay a cash
adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.

 

v. Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares
shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such certificate, all of
which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto (the “Assignment Form”) duly executed by the
Holder and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.

 

vi. Closing of Books. The Company will not close its stockholder books or
records in any manner that prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

 

3 

 

                                                                                             

vii. Acquisitions. If at any time while this Warrant is outstanding there is an
Acquisition (as defined below) in which the Company is not the surviving entity,
then the Holder shall receive from any surviving entity or successor to the
Company, in exchange for this Warrant, a new warrant in the surviving entity or
successor to the Company substantially in the form of this Warrant and with an
exercise price adjusted to reflect the nearest equivalent exercise price of
common stock of the surviving entity that would reflect the economic value of
this Warrant, but in the surviving entity. An “Acquisition” shall mean the
closing of a merger, share exchange, consolidation, acquisition of all or
substantially all of the assets or stock, reorganization or liquidation of the
Company that results in the stockholders of the Company immediately prior to
such transaction owning less than 50% of the voting capital stock of the Company
(or its successor or parent corporation) immediately after the transaction or,
in the case of a sale of assets or liquidation, the Company owning after the
transaction less than substantially all of the assets owned by the Company prior
to the transaction (other than an issuance of equity securities for the primary
purpose of raising capital) or any other event that constitutes a “Capital
Change” under the Company’s Second Restated Certificate of Incorporation, as it
may be amended, restated or otherwise modified from time to time. The Holder
shall execute all documentation required to be executed by the Company or the
acquirer or successor of the Company in connection with the Acquisition,
including, without limitation, escrow, indemnification and other similar
agreements. Subject to and to the extent permitted by applicable law, the
Company will endeavor to notify the Holder of any proposed Acquisition at least
30 days prior to the date of any Acquisition (or such shorter period as
reasonably practicable under the circumstances); provided that the failure to so
notify the Holder shall not in any way impair the Acquisition.

 

Section 3. Certain Adjustments.

 

a) Stock Dividends and Splits. If the Company, at any time while this Warrant is
outstanding: (i) pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant and which shall not include any dividends paid-in-kind
in respect to the Series G 1.5% Convertible Preferred Stock), (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, (iii)
combines (including by way of reverse stock split) outstanding shares of Common
Stock into a smaller number of shares or (iv) issues by reclassification of
shares of the Common Stock any shares of capital stock of the Company, then in
each case the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event, and the number of shares issuable upon exercise of
this Warrant shall be proportionately adjusted such that the aggregate Exercise
Price of this Warrant shall remain unchanged. Any adjustment made pursuant to
this Section 3(a) shall become effective immediately after the record date for
the determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination or re-classification.

 

b)  Calculations. All calculations under this Section 3 shall be made to the
nearest 1/100th of a cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 3, the number of shares of Common Stock deemed to
be issued and outstanding as of a given date shall be the sum of the number of
shares of Common Stock (excluding treasury shares, if any) issued and
outstanding.

 

c)  Notice to Holder.

 

i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted
pursuant to this Section 3, the Company shall promptly mail to the Holder a
notice setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement
of the facts requiring such adjustment.

 

4 

 

                                                                                        

ii.  Notice to Allow Exercise by Holder. If (A) the Company shall declare a
special nonrecurring cash dividend on or a redemption of the Common Stock, (B)
the Company shall authorize the granting to all holders of the Common Stock
rights or warrants to subscribe for or purchase any shares of capital stock of
any class or of any rights, or (C) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company, any of the events in Section 3.(c)ii (A), (B) or (C) being an “Event”,
then, in each case, the Company shall cause to be mailed to the Holder at its
last address as it shall appear upon the Warrant Register (as defined below) of
the Company, at least ten (10) calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record shall be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such Event is expected to become effective or close, as
applicable, and the date as of which it is expected that holders of the Common
Stock of record shall be entitled to exchange their shares of the Common Stock
for securities, cash or other property deliverable upon such Event; provided
that the failure to mail such notice or any defect therein or in the mailing
thereof shall not affect the validity of the corporate action required to be
specified in such notice. The Holder shall remain entitled to exercise this
Warrant during the period commencing on the date of such notice to the effective
date of the Event triggering such notice except as may otherwise be expressly
set forth herein.

 

Section 4. Transfer of Warrant.

 

a) Transferability. Subject to compliance with any applicable securities laws,
the conditions set forth in Section 4(d) hereof, and the conditions of the
Exchange Agreement (including, without limitation, the Company’s prior written
consent in accordance with the Exchange Agreement) pursuant to which this
Warrant was purchased, this Warrant and all rights hereunder (including, without
limitation, any registration rights) are transferable, in whole or in part, upon
surrender of this Warrant at the principal office of the Company or its
designated agent, together with an Assignment Form duly executed by the Holder
or its agent or attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees, as applicable, and in the denomination or
denominations specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly be cancelled. The Warrant, if properly assigned
in accordance herewith, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.

 

b)  New Warrants. This Warrant may be divided or combined with other Warrants
upon presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice. All Warrants issued on transfers or exchanges shall
be dated the Initial Exercise Date and shall be identical with this Warrant
except as to the number of Warrant Shares issuable pursuant thereto.

 

c)  Warrant Register. The Company shall, either directly or through its
representative, record or cause to be recorded, this Warrant, upon records to be
maintained by the Company for that purpose (the “Warrant Register”), in the name
of the record Holder hereof from time to time, which Warrant Register shall be
deemed to be accurate absent manifest error. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose
of any exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.

 

5 

 

 

d) Transfer Restrictions. If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this Warrant shall
not be either (i) registered pursuant to an effective registration statement
under the Securities Act and under applicable state securities or blue sky laws
or (ii) eligible for resale without volume or manner-of-sale restrictions or
current public information requirements pursuant to Rule 144, the Company may
require, as a condition of allowing such transfer, that the Holder or transferee
of this Warrant satisfy any other reasonable conditions established by the
Company, including, without limitation, a legal opinion reasonably acceptable to
the Company with respect to such transfer.

 

e)  Representation by the Holder. The Holder, by the acceptance hereof,
represents and warrants that it is acquiring this Warrant and, upon any exercise
hereof, will acquire the Warrant Shares issuable upon such exercise, for its own
account and not with a view to or for distributing or reselling such Warrant
Shares or any part thereof in violation of the Securities Act or any applicable
state securities law, except pursuant to sales registered or exempted under the
Securities Act. The Holder acknowledges that the Warrant Shares will not be
registered under the Securities Act of 1933, as amended, or any applicable
statute or foreign securities law, and will therefore not be freely
transferable.

 

Section 5. Miscellaneous.

 

a) No Rights as Stockholder Until Exercise. This Warrant does not entitle the
Holder to any voting rights, dividends or other rights as a stockholder of the
Company prior to the exercise hereof as set forth in Section 2(d)(i).

 

b)  Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants
that upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.

 

c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall not be a Business Day, then, such action may be taken or such right may be
exercised on the next succeeding Business Day.

 

d)  Authorized Shares.

 

The Company covenants that, during the period the Warrant is outstanding, it
will reserve from its authorized and unissued Common Stock a sufficient number
of shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action as
may be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of the trading market upon which the Common Stock may be listed.
The Company covenants that all Warrant Shares which may be issued upon the
exercise of the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant and payment for such Warrant
Shares in accordance herewith, be duly authorized, validly issued, fully paid
and nonassessable and free from all taxes, liens and charges created by the
Company in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).

 

6 

 

 

Except and to the extent waived or consented to by the Holder, the Company shall
not by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
reasonably appropriate to protect the rights of Holder as set forth in this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company will (i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (ii) take all such action as may be necessary or reasonably
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof, as may be,
necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of
Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or
consents thereto, as may be necessary from any public regulatory body or bodies
having jurisdiction thereof.

 

e) Jurisdiction. This Warrant is a contract between the Company and the Holder
and its terms shall be governed by and construed in accordance with the laws of
the State of New York applicable to contracts made and to be performed in the
State of New York, without giving effect to any choice or conflict of law
provision or rule of that or any other jurisdiction. The Company and each Holder
irrevocably consent to the jurisdiction of the United States federal courts and
the state courts located in New York City, in any suit or proceeding based on or
arising under this Warrant and irrevocably agree that all claims in respect of
such suit or proceeding may be determined in such courts. The Company and each
Holder irrevocably waives the defense of an inconvenient forum to the
maintenance of such suit or proceeding in such forum. The Company further agrees
that service of process upon the Company mailed by first class mail shall be
deemed in every respect effective service of process upon the Company in any
such suit or proceeding. Nothing herein shall affect the right of any Holder to
serve process in any other manner permitted by law. The Company agrees that a
final non-appealable judgment in any such suit or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on such judgment or in any
other lawful manner.

 

f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon
the exercise of this Warrant, if not registered, will have restrictions upon
resale imposed by state and federal securities laws.

 

g)  Nonwaiver. No course of dealing or any delay or failure to exercise any
right hereunder on the part of Holder shall operate as a waiver of such right or
otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the
fact that all rights hereunder terminate on the Termination Date.

 

h)  Notices. Any notice, request or other document required or permitted to be
given or delivered to the Holder by the Company shall be deemed delivered the
day after the date sent if sent by overnight courier, the same day sent if sent
by facsimile transmission or email with confirmation of receipt by the Holder,
or three (3) days after deposit with the US Postal Service if sent via certified
mail or first class mail if sent to the Holder at the address, facsimile number
or email address provided by the Holder as of the last date on which Holder
communicated in writing such contact information to the Company.

 

7 

 

 

i)  Remedies. The Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Warrant and hereby agrees to waive and
not to assert the defense in any action for specific performance that a remedy
at law would be adequate.

 

j) Successors and Assigns. Subject to applicable securities laws, the provisions
and limitations of the Exchange Agreement (including, without limitation, the
Company’s prior written consent in accordance with the Exchange Agreement) and
this Warrant, and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the
Company and the successors and permitted assigns of Holder. Such successors or
permitted assigns of the Holder shall be deemed to be the Holder for all
purposes hereunder. The provisions of this Warrant are intended to be for the
benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares. Nothing herein, express or implied,
is intended to or shall confer upon any other person any legal or equitable
right, benefit or remedy of any nature whatsoever, under or by reason of this
Warrant.

 

k) Entire Agreement. This Warrant constitutes the sole and entire agreement of
the parties to this Warrant with respect to the subject matter contained herein,
and supersedes all prior and contemporaneous understandings and agreements, both
written and oral, with respect to such subject matter.

 

l)  Amendment. This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the Holder.

 

m)  Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.

 

n)  Headings. The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

o)  Waiver of Jury Trial. Each party acknowledges and agrees that any
controversy which may arise under this Warrant is likely to involve complicated
and difficult issues and, therefore, each such party irrevocably and
unconditionally waives any right it may have to a trial by jury in respect of
any legal action arising out of or relating to this Warrant or the transactions
contemplated hereby.

 

(Signature Page Follows)

 

8 

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the ___ day of _____________, 2016.

 

  respirerx PHARMACEUTICALS inc.         By:     Name: Jeff E. Margolis   Title:
Vice President, Secretary and Treasurer

 

 

 

AGREED AND ACCEPTED:

 

[HOLDER]

 

Signature:           Name (print):           Address:                      
Email:           Facsimile Number:    

 

 

 

 

NOTICE OF EXERCISE

 

To: rESPIRERX PHARMACEUTICALS inc.

 

(1) The undersigned, pursuant to the provisions set forth in the attached
Warrant No. ______, hereby irrevocably elects to purchase (check applicable
box):

 

[  ] ____________ shares of the Common Stock of RespireRx Pharmaceuticals Inc.
covered by such Warrant.

 

(2) The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant. Such payment takes
the form of (check applicable box or boxes):

 

[  ] $__________ in lawful money of the United States; and/or

 

[  ] pursuant to Section 2(c) of the Warrant being exercised, the cancellation
of such portion of such Warrant as is exercisable for a total of _________
Warrant Shares (using a Closing Price of $_______ per share for purposes of this
calculation).

 

(3) Please issue a certificate or certificates representing said Warrant Shares
in the name of the undersigned or in such other name as is specified below:

 

                    (please print or type name and address)                
(please insert social security or other identifying number)  

 

The Warrant Shares shall be delivered to the following:

 

                                (please print or type name and address)  

 

and if such number of shares of Common Stock shall not be all the shares
evidenced by this Warrant Certificate, that a new Warrant for the balance of
such shares be registered in the name of, and delivered to, Holder.

 

     

 

The Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:

 

                             

 

(4) Accredited Investor. The undersigned is an “accredited investor” as defined
in Regulation D promulgated under the Securities Act of 1933, as amended.

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity:
_________________________________________________________________

 

Signature of Authorized Signatory of Investing Entity:
___________________________________________

 

Name of Authorized Signatory:
_____________________________________________________________

 

Title of Authorized Signatory:
______________________________________________________________

 

Date:
_________________________________________________________________________________

 

 

 

 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)

 

FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant
and all rights evidenced thereby are hereby assigned to

_______________________________________________ whose address is

 

_______________________________________________________________.

 

_______________________________________________________________

 

Dated: ______________, _______

 

  Holder’s Signature:               Holder’s Address:                    

 

Assignee’s Signature: ___________________________________________

 

Company’s Signature: ___________________________________________

 

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.