Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is dated as of
September 25, 2017, between GTx, Inc., a Delaware corporation (the “Company”),
and each purchaser identified on Exhibit A hereto (each, including its
successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

RECITALS

 

WHEREAS, on the terms and subject to the conditions set forth in this Agreement
and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and
Rule 506 promulgated thereunder, the Company desires to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, desires to purchase
from the Company, securities of the Company as more fully described in this
Agreement;

 

WHEREAS, the Company has authorized, upon the terms and conditions stated in
this Agreement, the sale and issuance of an aggregate of 5,483,320 immediately
separable Units (each a “Unit” and collectively, the “Units”), with each Unit
consisting of: (i) one share of Common Stock (as hereinafter defined) and (ii) a
Warrant (as hereinafter defined) to acquire 0.6 of a share of Common Stock;

 

WHEREAS, at the Closing (as hereinafter defined), each Purchaser, severally and
not jointly, wishes to purchase, and the Company wishes to sell, upon the terms
and conditions stated in this Agreement, the number of Units as hereafter
specified on Exhibit A annexed hereto; and

 

WHEREAS, the Company has engaged Stifel Nicolaus & Company, Incorporated as its
lead placement agent and Robert W. Baird & Co. Incorporated as its co-placement
agent (together, the “Placement Agents”) for the offering of the Units on a
“best efforts” basis.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree
as follows:

 

ARTICLE 1
DEFINITIONS

 

1.1                               Definitions.  In addition to the terms defined
elsewhere in this Agreement, for all purposes of this Agreement, the following
terms have the meanings set forth in this Section 1.1:

 

“Action” means any action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the Company’s Knowledge, threatened against or
affecting the Company, or any of its properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign).

 

“Additional Filing Deadline” means the later to occur of (i) the date sixty (60)
days after the date substantially all of the Registrable Securities registered
under the immediately preceding effective Registration Statement are sold and
(ii) the date six (6) months from the Effective Date of such immediately
preceding effective Registration Statement, or, if such date is not a Business
Day, the next date that is a Business Day; provided, however, that in the event
the foregoing deadline in any case falls within the Grace Period and the Company
has not yet filed with the Commission its Complete Form 10-K for the preceding
fiscal year by such deadline, then such deadline shall be extended until the
Business Day following date on which the Complete Form 10-K for such preceding
fiscal year is filed with the Commission; provided further, however, that such
deadline shall not be extended beyond the date that is 120 days following end of
the Company’s most recent fiscal year (or, if such date is not a Business Day,
the next date that is a Business Day). In any case where the Additional Filing
Deadline is extended pursuant to the foregoing provisos, then the Additional
Filing Deadline, as so extended, shall be deemed the Additional Filing Deadline
for all purposes of this Agreement.

 

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“Additional Registration Statement” shall have the meaning ascribed to such term
in Section 5.1(a).

 

“Additional Effectiveness Deadline” means the date which is the earliest to
occur of (i) if the Additional Registration Statement does not become subject to
review by the Commission, (a) ninety (90) days after the Additional Filing
Deadline or, if such date is not a Business Day, the next date that is a
Business Day, or (b) five (5) Trading Days after the Company receives written
notification from the Commission that the Additional Registration Statement will
not become subject to review and the Company fails to request to accelerate the
effectiveness of the Additional Registration Statement, or (ii) if the
Additional Registration Statement becomes subject to review by the Commission,
one hundred and twenty (120) days after the Additional Filing Deadline, or, if
such date is not a Business Day, the next date that is a Business Day; provided,
however, that in the event the foregoing applicable deadline in any case falls
within the Grace Period and the Company has not yet filed with the Commission
its Complete Form 10-K for the preceding fiscal year by such deadline, then such
deadline shall be extended until the Business Day following date on which the
Complete Form 10-K for such preceding fiscal year is filed with the Commission;
provided further, however, that such deadline shall not be extended beyond the
date that is 120 days following end of the Company’s most recent fiscal year
(or, if such date is not a Business Day, the next date that is a Business Day).
In any case where the Additional Effectiveness Deadline is extended pursuant to
the foregoing provisos, then the Additional Effectiveness Deadline, as so
extended, shall be deemed the Additional Effectiveness Deadline for all purposes
of this Agreement.

 

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 405 under the
Securities Act.

 

“Agreement” shall have the meaning ascribed to such term in the preamble.

 

“Applicable Purchasers” shall have the meaning ascribed to such term in
Section 3.32.

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

 

“Buy-In” and “Buy-In Price” shall have the meanings ascribed to such terms in
Section 6.1(d).

 

“Closing” shall have the meaning ascribed to such term in Section 2.2.

 

“Closing Date” shall have the meaning ascribed to such term in Section 2.2.

 

“Code” shall have the meaning ascribed to such term in Section 3.16.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means the common stock of the Company, par value $0.001 per
share, and any other class of securities into which such securities may
hereafter be reclassified or changed.

 

“Company” shall have the meaning ascribed to such term in the preamble.

 

“Company’s Knowledge” means with respect to any statement made to the knowledge
of the Company, that statement is based upon the actual knowledge of an
executive officer of the Company (as disclosed in the Company’s SEC Reports), in
each case after making reasonable inquiry.

 

“Complete Form 10-K” means the annual report on Form 10-K filed by the Company
with the Commission that includes, or incorporates by reference from the
Company’s most recent definitive proxy statement

 

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on Schedule 14A actually filed with the Commission, the information and
disclosures required by Part III of the Commission’s Form 10-K.  For the
avoidance of doubt, if the Company files its annual report on Form 10-K with the
Commission and does not include therein all of the information and disclosures
required by Part III of the Commission’s Form 10-K, then such annual report on
Form 10-K shall not be deemed a Complete Form 10-K for purposes of this
Agreement until the Company either (i) files an amendment to such annual report
on Form 10-K to include the information and disclosures required by Part III of
the Commission’s Form 10-K or (ii) files its definitive proxy statement on
Schedule 14A with the Commission for its next annual meeting of stockholders.

 

“Confidentiality Agreement” shall have the meaning ascribed to such term in
Section 3.32.

 

“Contingent Obligation” has the meaning set forth in Section 3.30.

 

“Cut Back Shares” shall have the meaning ascribed to such term in
Section 5.1(a).

 

“Derivative Transaction” shall have the meaning ascribed to such term in
Section 4.2(b).

 

“Disclosure Schedule” means the Disclosure Schedule, if any, delivered by the
Company concurrently with the execution and delivery of this Agreement and
referred to in the first paragraph of ARTICLE 3 of this Agreement.

 

“Effective Date” means the date that a Registration Statement is first declared
effective by the SEC.

 

“Effectiveness Deadline” means the Initial Effectiveness Deadline and the
Additional Effectiveness Deadline, as applicable.

 

“Effectiveness Period” shall have the meaning ascribed to such term in
Section 5.1(b).

 

“Environmental Laws” shall have the meaning ascribed to such term in
Section 3.15.

 

“ERISA” shall have the meaning ascribed to such term in Section 3.16.

 

“Event” shall have the meaning ascribed to such term in Section 5.1(d).

 

“Event Payments” shall have the meaning ascribed to such term in Section 5.1(d).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.

 

“Excluded Events” shall have the meaning ascribed to such term in
Section 5.1(d).

 

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

 

“FDA” means the U.S. Food and Drug Administration.

 

“Filing Deadline” means the Initial Filing Deadline and the Additional Filing
Deadline, as applicable.

 

“GAAP” shall have the meaning ascribed to such term in Section 3.8.

 

“Grace Period” shall mean the period commencing on the date that is 134 days
following the end of the Company’s most recent fiscal third quarter and ending
on, and including, the date that is 120 days following the end of the Company’s
most recent fiscal year.

 

“Indebtedness” has the meaning set forth in Section 3.30.

 

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“Indemnified Party” shall have the meaning ascribed to such term in
Section 5.4(c).

 

“Indemnifying Party” shall have the meaning ascribed to such term in
Section 5.4(c).

 

“Initial Filing Deadline” means thirty (30) days after the Closing Date or, if
such date is not a Business Day, the next date that is a Business Day.

 

“Initial Registration Statement” has the meaning set forth in Section 5.1(a).

 

“Initial Effectiveness Deadline” means the date which is the earliest of (i) if
the Initial Registration Statement does not become subject to review by the
Commission, (a) ninety (90) days after the Closing Date or (b) five (5) Trading
Days after the Company receives written notification from the Commission that
the Initial Registration Statement will not become subject to review and the
Company fails to request to accelerate the effectiveness of the Initial
Registration Statement, or (ii) if the Initial Registration Statement becomes
subject to review by the Commission, one hundred and twenty (120) days after the
Closing Date, or, if such date is not a Business Day, the next date that is a
Business Day.

 

“Insider” means each director, executive officer, other officer of the Company
participating in the offering of the Units, any beneficial owner of 20% or more
of the Company’s outstanding voting equity securities, calculated on the basis
of voting power, and any promoter connected with the Company in any capacity on
the date hereof.

 

“Insolvent” has the meaning set forth in Section 3.9.

 

“Intellectual Property” means (i) worldwide patents, patent applications,
invention disclosures and other rights of invention, filed with any governmental
authority, and all reissues, divisions, renewals, extensions, provisionals,
continuations and continuations-in-part thereof and all reexamined patents or
other applications or patents claiming the benefit of the filing date of any of
the foregoing; (ii) worldwide (A) registered trademarks and service marks and
registrations and applications for such registrations, and (B) unregistered
trademarks and service marks, trade names, fictitious business names, corporate
names, trade dress, logos, product names and slogans, including any common law
rights; in each case together with the goodwill associated therewith;
(iii) worldwide (A) registered copyrights in published or unpublished works,
mask work rights and similar rights, including rights created under Sections
901-914 of Title 17 of the United States Code, mask work registrations, and
copyright applications for registration, including any renewals thereof, and
(B) any unregistered copyrightable works and other rights of authorship in
published or unpublished works; (iv) worldwide (A) internet domain names;
(B) website content; (C) telephone numbers; and (D) moral rights and publicity
rights; (v) any computer program or other software (irrespective of the type of
hardware for which it is intended), including firmware and other software
embedded in hardware devices, whether in the form of source code, assembly code,
script, interpreted language, instruction sets or binary or object code
(including compiled and executable programs), including any library, component
or module of any of the foregoing, including, in the case of source code, any
related images, videos, icons, audio or other multimedia data or files, data
files, and header, development or compilations tools, scripts, and files, and
(vi) worldwide confidential or proprietary information or trade secrets,
including technical information, inventions and discoveries (whether or not
patentable and whether or not reduced to practice) and improvements thereto,
know-how, processes, discoveries, developments, designs, techniques, plans,
schematics, drawings, formulae, preparations, assays, surface coatings,
diagnostic systems and methods, patterns, compilations, databases, database
schemas, specifications, technical data, inventions, concepts, ideas, devices,
methods, and processes; and includes any rights to exclude others from using or
appropriating any Intellectual Property rights, including the rights to sue for
or assets claims against and remedies against past, present or future
infringements or misappropriations of any or all of the foregoing and rights of
priority and protection of interests therein, and any other proprietary,
intellectual property or other rights relating to any or all of the foregoing
anywhere in the world.

 

“Issuer Covered Person” shall have the meaning ascribed to such term
Section 3.38.

 

“Legend Removal Date” shall have the meaning ascribed to such term in
Section 6.1(c).

 

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“Losses” means any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation.

 

“Material Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, results of operations, condition (financial or otherwise),
business, or prospects of the Company taken as a whole, (ii) the ability of the
Company to perform its obligations under the Transaction Documents or (iii) the
legality, validity or enforceability of any Transaction Document.

 

“NASDAQ” means The NASDAQ Stock Market, LLC.

 

“Occupational Laws” shall have the meaning ascribed to such term in
Section 3.16.

 

“OFAC” shall have the meaning ascribed to such term in Section 3.36.

 

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

 

“Placement Agents” shall have the meaning ascribed to such term the Recitals to
this Agreement.

 

“Preferred Stock” shall have the meaning ascribed to such term in Section 3.3.

 

“Price Per Unit” shall have the meaning ascribed to such term in Section 2.1.

 

“Principal Purchasers” means, as of any time, the Purchaser or Purchasers
holding or having the right to acquire, as of such time, at least a
majority-in-interest of the total number of Unit Shares.

 

“Principal Trading Market” means the Trading Market on which the Common Stock is
primarily listed on and quoted for trading.

 

“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, a partial proceeding, such as a deposition),
whether commenced or threatened in writing.

 

“Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.

 

“Purchaser Party” shall have the meaning ascribed to such term in Section 6.6.

 

“Purchasers” shall have the meaning ascribed to such term in the preamble.

 

“Registration Statement” means each registration statement required to be filed
under ARTICLE 5, including the Initial Registration Statement, all Additional
Registration Statements, and, in each case, the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.

 

“Registrable Securities” means the Shares and any shares of Common Stock issued
as (or issuable upon the conversion or exercise of any warrant, right or other
security that is issued as) a dividend or other distribution with respect to, or
in exchange for, or in replacement of, the Shares, provided, that the holder of
such

 

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Shares has completed and delivered to the Company a Selling Stockholder
Questionnaire; and provided further, that the Shares shall cease to be
Registrable Securities upon the earliest to occur of the following: (A) sale by
any Person to the public either pursuant to a registration statement under the
Securities Act or under Rule 144 (in which case, only such Shares sold shall
cease to be Registrable Securities) or (B) becoming eligible for sale by the
holder thereof pursuant to Rule 144 without volume or manner of sale
restrictions and without current public information pursuant to Rule 144.

 

“Removal Request Date” shall have the meaning ascribed to such term in
Section 6.1(c).

 

“Rule 144,” “Rule 415,” and “Rule 424” means Rule 144, Rule 415 and Rule 424,
respectively, promulgated by the Commission pursuant to the Securities Act, as
such Rules may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC having substantially the same effect as such Rule.

 

“SEC Guidance” means (i) any publicly-available written or oral guidance,
comments, requirements or requests of the Commission staff and (ii) the
Securities Act.

 

“SEC Restrictions” shall have the meaning ascribed to such term in
Section 5.1(a).

 

“SEC Reports” shall have the meaning ascribed to such term in Section 3.7.

 

“Securities” means the Units, the Warrants and the Shares.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.

 

“Selling Stockholder Questionnaire” shall have the meaning ascribed to such term
in Section 5.2(j).

 

“Shares” means, collectively, the Unit Shares and the Warrant Shares.

 

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the location and/or
reservation of borrowable shares of Common Stock).

 

“Trading Day” means a day on which the Principal Trading Market is open for
trading.

 

“Trading Market” means any of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the NYSE
American, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global
Select Market, or the New York Stock Exchange (or any successors to any of the
foregoing).

 

“Transaction Documents” means this Agreement, the Warrants, all exhibits and
schedules thereto and hereto and any other documents or agreements executed in
connection with the transactions contemplated hereunder.

 

“Transfer Agent” means Computershare Trust Company, N.A., the current transfer
agent of the Company, with a mailing address of 250 Royall Street, Canton,
Massachusetts 02021, and a telephone number of 1-877-282-1168, and any successor
transfer agent of the Company.

 

“Units” has the meaning set forth in the Recitals to this Agreement. Units will
not be issued or certificated. The Unit Shares and the Warrants are immediately
separable and will be issued separately.

 

“Unit Purchase Price” shall have the meaning ascribed to such term in
Section 2.1.

 

“Unit Shares” shall have the meaning ascribed to such term the Recitals to this
Agreement.

 

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“Voting Commitment” shall have the meaning ascribed to such term in
Section 4.2(a).

 

“Warrant Exercise Price” shall mean $9.02.

 

“Warrants” shall have the meaning ascribed to such term in Section 2.3.

 

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.

 

ARTICLE 2
PURCHASE AND SALE

 

2.1                               Purchase and Sale. Subject to and upon the
terms and conditions set forth in this Agreement, at the Closing, the Company
shall issue and sell to each Purchaser, and each Purchaser shall, severally and
not jointly, purchase from the Company, such number of Units set forth opposite
their respective names on Exhibit A, at a price per Unit equal to $8.845 (the
“Price Per Unit” and the total purchase price for the Units, the “Unit Purchase
Price”).

 

2.2                               Closing.  The Company agrees to issue and sell
to the Purchasers and, in consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Purchasers agree, severally and not jointly, to purchase the Units.  The
closing of the purchase and sale of the Units (the “Closing”) shall take place
at the offices of Cooley LLP located at 101 California Street, 5th Floor, San
Francisco, California, three Business Days following the satisfaction or waiver
of the conditions set forth in Section 2.5, or at such other time and place or
on such date as the Principal Purchasers and the Company may agree upon (such
date is hereinafter referred to as the “Closing Date”).

 

2.3                               Payment. On the Closing Date, (a) each
Purchaser shall pay to the Company its Unit Purchase Price in United States
dollars and in immediately available funds, by wire transfer to the Company’s
account as set forth in instructions previously delivered to each Purchaser,
(b) the Company shall irrevocably instruct the Transfer Agent to deliver, on an
expedited basis, to each Purchaser, either in book entry form in the Direct
Registration System or in the form of a stock certificate, as set forth on the
Stock Registration Questionnaire included as Exhibit C, the number of Unit
Shares set forth opposite such Purchaser’s name on Exhibit A hereto, and (c) the
Company shall issue to each Purchaser a warrant substantially in the form
attached hereto as Exhibit B (each a “Warrant” and collectively, the “Warrants”)
pursuant to which such Purchaser shall have the right to acquire the number of
Warrant Shares set forth opposite such Purchaser’s name on Exhibit A hereto, and
in the case of clauses (b) and (c), duly executed on behalf of the Company and
registered in the name of such Purchaser as set forth on the Stock Registration
Questionnaire included as Exhibit C. The Warrants issued and sold at the Closing
shall have an initial exercise price equal to the Warrant Exercise Price.

 

2.4                               Deliveries.

 

(a)                                 Company.  Except for the delayed delivery
contemplated by Sections 2.4(a)(iii), on or prior to the Closing Date, the
Company shall deliver or cause to be delivered to each Purchaser the following:

 

(i)                                     this Agreement duly executed by the
Company;

 

(ii)                                  a copy of the irrevocable instructions to
the Transfer Agent instructing the Transfer Agent to deliver, on an expedited
basis, to such Purchaser, either in book entry form in the Direct Registration
System or in the form of a stock certificate as indicated by such Purchaser on
the Stock Registration Questionnaire included as Exhibit C, the number of Unit
Shares set forth opposite such Purchaser’s name on Exhibit A hereto, registered
in the name of such Purchaser as set forth on the Stock Registration
Questionnaire included as Exhibit C;

 

(iii)                               a Warrant, registered in the name of such
Purchaser as set forth on the Stock Registration Questionnaire included as
Exhibit C, to purchase up to the number of shares of Common Stock set forth
opposite such Purchaser’s name on Exhibit A hereto (such Warrant to be delivered
as promptly as practicable after the Closing Date but in no event more than five
Trading Days after the Closing Date);

 

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(iv)                              the Company shall have delivered a
Certificate, executed on behalf of the Company by its chief executive officer
and its principal financial officer, dated as of the Closing Date, certifying to
the fulfillment of the conditions specified in subsections (i), (ii), (iv), (v),
(vi), (vii) and (viii) of Section 2.5(b);

 

(v)                                 the Company shall have delivered a
Certificate, executed on behalf of the Company by its Secretary, dated as of the
Closing Date, certifying the resolutions adopted by the Board of Directors and a
duly authorized committee thereof approving the transactions contemplated by the
Transaction Documents and the issuance of the Securities, certifying the current
versions of the Certificate of Incorporation and Bylaws of the Company and
certifying as to the signatures and authority of Persons signing the Transaction
Documents and related documents on behalf of the Company;

 

(vi)                              a legal opinion of Cooley LLP, counsel for the
Company, in substantially the form attached hereto as Exhibit D, executed by
Cooley LLP and addressed to the Purchasers and to the Placement Agents; and

 

(vii)                           A NASDAQ Listing of Additional Shares
notification form.

 

(b)                                 Purchasers.  On or prior to the Closing
Date, each Purchaser shall deliver or cause to be delivered to the Company the
following:

 

(i)                                     this Agreement duly executed by such
Purchaser;

 

(ii)                                  a fully completed and duly executed Stock
Registration Questionnaire in the form attached hereto as Exhibit C;

 

(iii)                               unless such Purchaser is a director or an
executive officer (as such term is defined in Rule 501(f) promulgated by the
Commission under the Securities Act) of the Company as of the Closing Date, a
fully completed and duly executed Accredited Investor Qualification
Questionnaire in the form attached hereto as Exhibit E;

 

(iv)                              a fully completed and duly executed Bad Actor
Questionnaire in the form attached hereto as Exhibit F; and

 

(v)                                 the Unit Purchase Price by wire transfer to
the account specified by the Company.

 

2.5                               Closing Conditions.

 

(a)                                 The obligations of the Company hereunder
with respect to any Purchaser in connection with the Closing are subject to the
following conditions being met:

 

(i)                                     the accuracy in all material respects on
the Closing Date of the representations and warranties of such Purchaser
contained herein (unless as of a specific date therein in which case they shall
be accurate as of such date);

 

(ii)                                  all obligations, covenants and agreements
of such Purchaser required to be performed at or prior to the Closing Date shall
have been performed in all material respects;

 

(iii)                               the delivery by such Purchaser of the items
set forth in Section 2.4(b) of this Agreement; and

 

(iv)                              NASDAQ shall have raised no objection to the
consummation of the transactions contemplated by the Transaction Documents in
the absence of stockholder approval of such transactions.

 

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(b)                                 The respective obligations of the Purchasers
hereunder in connection with the Closing are subject to the following conditions
being met:

 

(i)                                     the representations and warranties made
by the Company in ARTICLE 3 hereof qualified as to materiality shall be true and
correct as of the date hereof and the Closing Date, except to the extent any
such representation or warranty expressly speaks as of an earlier date, in which
case such representation or warranty shall be true and correct as of such
earlier date, and, the representations and warranties made by the Company in
ARTICLE 3 hereof not qualified as to materiality shall be true and correct in
all material respects as of the date hereof and the Closing Date, except to the
extent any such representation or warranty expressly speaks as of an earlier
date, in which case such representation or warranty shall be true and correct in
all material respects as of such earlier date;

 

(ii)                                  all obligations, covenants and agreements
of the Company required to be performed at or prior to the Closing Date, whether
under this Agreement or the other Transaction Documents, shall have been
performed in all material respects;

 

(iii)                               the delivery by the Company of the items set
forth in Section 2.4(a) of this Agreement;

 

(iv)                              the Company shall have obtained any and all
consents, permits, approvals, registrations and waivers necessary or appropriate
for consummation of the purchase and sale of the Units and the consummation of
the other transactions contemplated by the Transaction Documents, all of which
shall be in full force and effect, except for such that would not reasonably be
expected to have a Material Adverse Effect;

 

(v)                                 no judgment, writ, order, injunction, award
or decree of or by any court, or judge, justice or magistrate, including any
bankruptcy court or judge, or any order of or by any governmental authority,
shall have been issued, and no action or proceeding shall have been instituted
by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated hereby or in the other Transaction Documents;

 

(vi)                              no stop order or suspension of trading shall
have been imposed by NASDAQ, the Commission or any other governmental or
regulatory body with respect to public trading in the Common Stock;

 

(vii)                           NASDAQ shall have raised no objection to the
consummation of the transactions contemplated by the Transaction Documents in
the absence of stockholder approval of such transactions;

 

(viii)                        there shall have been no Material Adverse Effect
with respect to the Company since the date hereof; and

 

(ix)                              from the date hereof to the Closing Date,
trading in the Common Stock shall not have been suspended by the Commission or
the Company’s principal Trading Market, and, at any time prior to the Closing
Date, trading in securities generally as reported by Bloomberg L.P. shall not
have been suspended or limited, or minimum prices shall not have been
established on securities whose trades are reported by such service, or on any
Trading Market, nor shall a banking moratorium have been declared either by the
United States or New York State authorities nor shall there have occurred any
material outbreak or escalation of hostilities or other national or
international calamity of such magnitude in its effect on, or any material
adverse change in, any financial market which, in each case, in the reasonable
judgment of such Purchaser, makes it impracticable or inadvisable to purchase
the Securities at the Closing.

 

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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company hereby represents and warrants to the Purchasers and to the
Placement Agents as of the date hereof (except for the representations and
warranties that speak as of a specific date, which shall be made as of such
date) that, except as otherwise set forth in the Disclosure Schedule, if any,
delivered herewith:

 

3.1                               Organization, Good Standing and
Qualification.  The Company is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has all requisite corporate power and legal authority to own and use its
properties and assets and carry on its business as now conducted and to own its
properties.  The Company is not in violation of any of the provisions of its
Certificate of Incorporation or Bylaws. The Company is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
makes such qualification or leasing necessary unless the failure to so qualify
has not had and could not reasonably be expected to have a Material Adverse
Effect and no Proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing or seeking to revoke, limit or curtail such power and
authority or qualification.  The Company has no subsidiaries.

 

3.2                               Authorization; Enforcement.  The Company has
all corporate right, power and authority to enter into this Agreement and each
of the other Transaction Documents and to consummate the transactions and
otherwise carry out its obligations contemplated hereby and thereby. All
corporate action on the part of the Company, its directors and stockholders
necessary for the authorization, execution, delivery and performance of the
Transaction Documents by the Company, the authorization, sale, issuance and
delivery of the Securities contemplated herein and the performance of the
Company’s obligations hereunder and thereunder has been taken. The Transaction
Documents have been (or upon delivery will have been) duly executed and
delivered by the Company and constitute the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with their terms,
except:  (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.

 

3.3                               Capitalization.  The authorized capital stock
of the Company consists of 60,000,000 shares of Common Stock and 5,000,000
shares of preferred stock, par value $0.001 per share (the “Preferred Stock”),
of which 16,058,589 shares of Common Stock are outstanding as of the date hereof
(prior to the issuance of the Units) and no shares of Preferred Stock are
outstanding as of the date hereof. All of the issued and outstanding shares of
the Company’s capital stock have been duly authorized and validly issued and are
fully paid and non-assessable. The Company has not issued any capital stock
since its most recently filed Annual Report on Form 10-K, other than pursuant to
the vesting of restricted stock units issued pursuant to the equity compensation
plans and arrangements disclosed in the SEC Reports. The capitalization of the
Company is as set forth on Schedule 3.3 hereto. Except (i) for options to
purchase Common Stock or other equity awards (including restricted stock units)
issued to employees, consultants and members of the Board of Directors pursuant
to the equity compensation plans or arrangements disclosed in the SEC Reports,
(ii) for securities exercisable for, or convertible into or exchangeable for any
shares of capital stock of the Company disclosed in the SEC Reports,
(iii) shares issuable under the Company’s Directors’ Deferred Compensation Plan
disclosed in the SEC Reports, and (iv) as contemplated by this Agreement, there
are no existing options, warrants, calls, preemptive (or similar) rights,
subscriptions or other rights, agreements, arrangements or commitments of any
character obligating the Company to issue, transfer or sell, or cause to be
issued, transferred or sold, any shares of the capital stock of, or other equity
interests in, the Company or any securities convertible into or exchangeable for
such shares of capital stock or other equity interests, and there are no
outstanding contractual obligations of the Company to repurchase, redeem or
otherwise acquire any shares of its capital stock or other equity interests.  No
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by the
Transaction Documents.  There are no outstanding securities or instruments of
the Company that contain any redemption or similar provisions, and there are no
contracts, commitments, understandings or arrangements by which the Company is
or may become bound to redeem a security of the Company.  Except as disclosed in
the SEC Reports, the Company does not have any stock appreciation rights or
“phantom stock” plans or any similar plan or agreement. The issue and sale of
the Units will not result in the right of any holder of Company securities to
adjust the exercise,

 

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conversion or exchange price under such securities.  Except for customary
adjustments as a result of stock dividends, stock splits, combinations of
shares, reorganizations, recapitalizations, reclassifications or other similar
events, there are no anti-dilution or price adjustment provisions contained in
any security issued by the Company (or in any agreement providing rights to
security holders) and the issuance and sale of the Securities will not obligate
the Company to issue shares of Common Stock or other securities to any Person
(other than the Purchasers) and will not result in a right of any holder of
securities to adjust the exercise, conversion, exchange or reset price under
such securities.  There are no stockholders agreements, voting agreements or
other similar agreements with respect to the Company’s capital stock to which
the Company is a party or, to the Company’s Knowledge, between or among any of
the Company’s stockholders.

 

3.4                               Issuance; Reservation of Shares.  The issuance
of the Unit Shares has been duly and validly authorized by all necessary
corporate and stockholder action, and the Unit Shares, when issued and paid for
pursuant to this Agreement, will be validly issued, fully paid and
non-assessable, and shall be free and clear of all encumbrances and restrictions
(other than as provided in the Transaction Documents).  The issuance of the
Warrants and the Warrant Shares has been duly and validly authorized by all
necessary corporate and stockholder action, and the Warrant Shares, when issued
upon the due exercise of the Warrants, will be validly issued, fully paid and
non-assessable, and shall be free and clear of all encumbrances and restrictions
(other than as provided in the Transaction Documents). The Company will reserve,
at all times that the Warrants remain outstanding, such number of shares of
Common Stock sufficient to enable the full exercise of the then outstanding
Warrants.  Assuming (A) the accuracy of the representations and warranties of
the Purchasers set forth in ARTICLE 4 hereof, (B) none of the Insiders or the
Placement Agents or their controlling persons (within the meaning of
Rule 506(d)(1) of the Securities Act) is subject to any “bad actor”
disqualification specified in Rule 506(d) of the Securities Act that has not
been waived pursuant to Rule 506(d)(2) of the Securities Act, and (C) the
Insiders and each Placement Agent and its controlling persons (within the
meaning of Rule 506(d)(1) of the Securities Act) have complied with the “bad
actor” disclosure requirements set forth in Rule 506(e) of the Securities Act
and any disclosure requirements in connection with any waiver of the
disqualification provisions of Rule 506(d) of the Securities Act, then the
offer, issuance and sale of the Shares to the Purchasers pursuant to the
Agreement, are exempt from the registration requirements of the Securities Act.

 

3.5                               No Conflicts.  The execution, delivery and
performance of the Transaction Documents by the Company and the issuance and
sale of the Securities will not conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation (with
or without notice, lapse of time or both) of (i) the Company’s Certificate of
Incorporation or the Company’s Bylaws, both as in effect on the date hereof
(true and complete copies of which have been made available to the Purchasers
through the EDGAR system), (ii) any statute, rule, regulation or order,
judgment, injunction, decree or other restriction of any governmental agency or
body or any court, domestic or foreign, having jurisdiction over the Company or
any of its respective assets or properties, or (iii) any material agreement or
instrument to which the Company is a party or by which the Company is bound or
to which any of their respective assets or properties is subject, in each case
except for any such conflict, breach, violation or default that would not
reasonably be expected to have a Material Adverse Effect.

 

3.6                               Filings, Consents and Approvals.  The Company
is not required to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any court or other
federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than filings that have been made, or will be made,
or consents that have been obtained, or will be obtained, pursuant to the
rules and regulations of NASDAQ, including a NASDAQ Listing of Additional Shares
notification form, applicable state securities laws and post-sale filings
pursuant to applicable state and federal securities laws which the Company
undertakes to file or obtain within the applicable time periods and the filings
required to be made pursuant to Sections 5.1 and 6.4 of this Agreement.

 

3.7                               SEC Reports.  The Company has filed all
reports, schedules, forms, registration statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the twenty-four (24)
months preceding the date hereof (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports”) on a timely basis or has
received a valid extension of such time of filing and has

 

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filed any such SEC Reports prior to the expiration of any such extension. As of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act, as applicable, and
none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.  The Company has never
been an issuer subject to Rule 144(i) under the Securities Act. The Company has
not received any letters of comment from the staff of the Commission that have
not been satisfactorily resolved as of the date hereof.  All material agreements
to which the Company is a party or to which the property or assets of the
Company is subject are included as part of or identified in the SEC Reports, to
the extent such agreements are required to be included or identified pursuant to
the rules and regulations of the SEC.

 

3.8                               Financial Statements.  The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing.  Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles (“GAAP”), applied on a consistent basis
during the periods involved, except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.

 

3.9                               Material Changes; Undisclosed Events,
Liabilities or Developments.  Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
a subsequent SEC Report filed prior to the date hereof:  (i) there has been no
event, occurrence or development that has had or that could reasonably be
expected to have a Material Adverse Effect, (ii) the Company has not incurred
any liabilities (contingent or otherwise) other than (A) trade payables and
accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made with the
Commission, (iii) the Company has not altered its method of accounting or
changed its principal registered public accounting firm, (iv) the Company has
not declared or made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock and (v) the Company has not issued any
equity securities, except pursuant to existing Company equity compensation
plans. The Company does not have pending before the Commission any request for
confidential treatment of information.  The Company has not taken any steps to
seek protection pursuant to any bankruptcy law and the Company has not received
any written notice that any Person intends to initiate involuntary bankruptcy
proceedings against the Company. The Company is not as of the date hereof, and
immediately after giving effect to the transactions contemplated hereby to occur
at the Closing, will not be Insolvent (as defined below). For purposes of this
Section 3.9, “Insolvent” means (i) the present fair saleable value of the
Company’s assets is less than the amount required to pay the Company’s total
Indebtedness, (ii) the Company is unable to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured, (iii) the Company intends to incur or believes that it
will incur debts that would be beyond its ability to pay as such debts mature,
or (iv) the Company has unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted.

 

3.10                        Internal Controls.  The Company maintains a system
of internal control over financial reporting (as such term is defined in
Rule 13a-15(f) of the Exchange Act) that complies with the requirements of the
Exchange Act and has been designed by the Company’s principal executive officer
and principal financial officer, or under their supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles; the Company’s internal control over
financial reporting is effective and the Company is not aware of any material
weaknesses in its internal control over financial reporting; there has been no
fraud, whether or not material, that involves management or other employees who
have a significant role in the Company’s internal control over financial
reporting; since the date of the latest audited financial statements included or
incorporated by reference in the Company’s SEC Reports and except as disclosed
in the Company’s SEC Reports, there has been no change in the Company’s internal
control over financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial
reporting. The Company maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15(e) of the Exchange Act) that comply with the

 

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requirements of the Exchange Act; such disclosure controls and procedures have
been designed to ensure that material information relating to the Company is
made known to the Company’s principal executive officer and principal financial
officer by others within those entities; such disclosure controls and procedures
are effective. The Company is in compliance in all material respects with all
applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated by the Commission thereunder.  The Company maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

 

3.11                        Accountant.  To the Company’s Knowledge, Ernst &
Young LLP, which has expressed its opinion with respect to the Company’s
financial statements as of December 31, 2016, 2015 and 2014, respectively, and
included in the SEC Reports (including the related notes), is an independent
registered public accounting firm as required by the Act and the Public Company
Accounting Oversight Board (United States). Ernst & Young LLP have not been
engaged by the Company to perform any “prohibited activities” (as defined in
Section 10A of the Exchange Act).

 

3.12                        Litigation.  Except as set forth in the SEC Reports,
there is not pending or, to the Company’s Knowledge, threatened or contemplated,
any action, suit or proceeding to which the Company is a party or of which any
property or assets of the Company is the subject before or by any court or
governmental agency, authority or body, or any arbitrator, which, individually
or in the aggregate, (i) adversely affects or challenges the legality, validity
or enforceability of any of the Transaction Documents or the Securities or
(ii) could, if there were an unfavorable decision, have or reasonably be
expected to result in a Material Adverse Effect.  There are no current or
pending legal, governmental or regulatory actions, suits or proceedings that are
required to be described in the SEC Reports that have not been so described. 
Neither the Company nor any director or officer of the Company is or has been
the subject of any Action involving a claim of violation of or liability under
federal or state securities laws or a claim of breach of fiduciary duty.  There
has not been, and to the Company’s Knowledge, there is not pending or
contemplated, any investigation by the Commission involving the Company or any
current or former director or officer of the Company.  The Commission has not
issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company under the Exchange Act or the
Securities Act.

 

3.13                        Tax Matters.  The Company (i) has filed all federal,
state, local and foreign income, franchise tax  and all other tax returns
reports and declarations required by any jurisdiction to which it is subject to
be filed or has requested extensions thereof (except in any case in which the
failure so to file would not have a Material Adverse Effect), except as set
forth in the SEC Reports, (ii) has paid all taxes required to be paid by it and
any other assessment, fine or penalty levied against it, to the extent that any
of the foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith and (iii) has set aside
on its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply, except in those, in each of the cases described in clauses (i), (ii) and
(iii) of this Section 3.13, that would not singularly or in the aggregate have a
Material Adverse Effect, except as set forth in or contemplated in the SEC
Reports.

 

3.14                        Insurance.  The Company maintains in full force and
effect insurance coverage that is customary for comparably situated companies
for the business being conducted and properties owned or leased by the Company,
and the Company reasonably believes such insurance coverage to be adequate
against all liabilities, claims and risks against which it is customary for
comparably situated companies to insure.

 

3.15                        Environmental Matters.  The Company (A) is in
compliance in all material respects with any and all applicable federal, state,
local and foreign laws, rules, regulations, decisions and orders relating to
pollution or  protection of human health and safety, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or
subsurface strata), including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of chemicals, hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, “Environmental
Laws”); (B) has received and is in material compliance with all permits,
licenses or other approvals required of it under applicable Environmental Laws
to conduct its business; and (C) has not received

 

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notice of any actual or potential liability for the investigation or remediation
of any disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except in any such case for any such failure to
comply, or failure to receive required permits, licenses or approvals, or
liability as would not, individually or in the aggregate, have a Material
Adverse Effect.

 

3.16                        Labor Relations.  The Company (A) is in compliance,
in all material respects, with any and all applicable foreign, federal, state
and local laws, rules, regulations, treaties, statutes and codes promulgated by
any and all governmental authorities (including pursuant to the Occupational
Health and Safety Act) relating to the protection of human health and safety in
the workplace (“Occupational Laws”); (B) has received all material permits,
licenses or other approvals required of it under applicable Occupational Laws to
conduct their business as currently conducted; and (C) is in compliance, in all
material respects, with all terms and conditions of such permits, licenses or
approvals.  No action, proceeding, revocation proceeding, writ, injunction or
claim is pending or, to the Company’s Knowledge, threatened against the Company
relating to Occupational Laws, and the Company does not have knowledge of any
material facts, circumstances or developments relating to its operations or cost
accounting practices that could reasonably be expected to form the basis for or
give rise to such actions, suits, investigations or proceedings.  Each employee
benefit plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), that is maintained,
administered or contributed to by the Company or any of its affiliates for
employees or former employees of the Company and has been maintained in material
compliance with its terms and the requirements of any applicable statutes,
orders, rules and regulations, including but not limited to, ERISA and the
Internal Revenue Code of 1986, as amended (the “Code”).  No prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975 of the
Code, has occurred with respect to any such plan excluding transactions effected
pursuant to a statutory or administrative exemption; and for each such plan that
is subject to the funding rules of Section 412 of the Code or Section 302 of
ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Code
has been incurred, whether or not waived, and the fair market value of the
assets of each such plan (excluding for these purposes accrued but unpaid
contributions) exceeds the present value of all benefits accrued under such plan
determined using reasonable actuarial assumptions.  To the Company’s Knowledge,
no executive officer or key employee of the Company plans to terminate
employment with the Company.  The Company is in compliance in all material
respects with all federal, state, local and foreign laws and regulations
respecting labor, employment and employment practices and benefits, terms and
conditions of employment and wages and hours, except where failure to be in
compliance would not, either individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.

 

3.17                        Certificates, Authorities and Permits.  The Company
holds, and is operating in compliance in all material respects with, all
registrations, approvals, certificates, authorizations and permits of any
governmental authority or self-regulatory body required for the conduct of its
business as described in the SEC Reports, including without limitation, all such
registrations, approvals, certificates, authorizations and permits required by
the FDA or any other federal, state, local or foreign agencies or bodies engaged
in the regulation of pharmaceuticals or biohazardous substances or materials;
and the Company has not received notice of any revocation or modification of any
such registration, approval, certificate, authorization and permit or has reason
to believe that any such registration, approval, certificate, authorization and
permit will not be renewed in the ordinary course that could lead to, the
withdrawal, revocation, suspension, modification or termination of any such
registration, approval, certificate, authorization or permit, which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
could result in a Material Adverse Effect.

 

3.18                        Title to Assets.  The Company has good and
marketable title to all property (whether real or personal) owned by it that is
material to the business of the Company, in each case free and clear of all
liens, claims, security interests, other encumbrances or defects, except those
that could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.  The property held under lease by the Company is held
under valid, subsisting and enforceable leases of which the Company is in
compliance in all material respects, with only such exceptions with respect to
any particular lease as do not interfere in any material respect with the
conduct of the business of the Company.

 

3.19                        Intellectual Property.  The Company owns, possesses,
or can acquire on reasonable terms, all Intellectual Property necessary for the
conduct of its business as now conducted or as described in the SEC Reports to
be conducted in all material respects, except as such failure to own, possess,
or acquire such rights would not have a Material Adverse Effect.  To the
Company’s Knowledge, all Intellectual Property of the Company is valid and

 

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enforceable, except as would not, singly or in the aggregate, have a Material
Adverse Effect. The Company has not received any opinion from its legal counsel
concluding that any activities of its respective businesses infringe,
misappropriate, or otherwise violate, valid and enforceable Intellectual
Property of any other person.  Except as set forth in the SEC Reports, (A) to
the Company’s Knowledge, there is no infringement, misappropriation or violation
by third parties of any such Intellectual Property, except as such infringement,
misappropriation or violation would not have a Material Adverse Effect;
(B) there is no pending or, to Company’s Knowledge, threatened action, suit,
proceeding or claim by others challenging the Company’s rights in or to any such
Intellectual Property, and the Company is unaware of any material facts which
would form a reasonable basis for any such claim; (C) the Intellectual Property
owned by the Company, and to the Company’s Knowledge, the Intellectual Property
licensed to the Company, have not been adjudged invalid or unenforceable, in
whole or in part, and there is no pending or threatened action, suit, proceeding
or claim by others challenging the validity or scope of any such Intellectual
Property, and the Company is unaware of any material facts which would form a
reasonable basis for any such claim; (D) to the Company’s Knowledge, there is no
pending or threatened action, suit, proceeding or claim by others that the
Company infringes, misappropriates or otherwise violates any Intellectual
Property or other proprietary rights of others, the Company has not received any
written notice of such claim and the Company is unaware of any other material
fact which would form a reasonable basis for any such claim; and (E) to the
Company’s Knowledge, no Company employee is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with the use of such employee’s best efforts to
promote the interest of the Company or that would conflict with the Company’s
business; none of the execution and delivery of this Agreement, the carrying on
of the Company’s business by the employees of the Company, and the conduct of
the Company’s business as proposed, will conflict with or result in a breach of
terms, conditions, or provisions of, or constitute a default under, any
contract, covenant or instrument under which any such employee is now obligated;
and it is not and will not be necessary to use any inventions, trade secrets or
proprietary information of any of its consultants, or its employees (or Persons
it currently intends to hire) made prior to their employment by the Company,
except for technology that is licensed to or owned by the Company.  All licenses
for the use of Company’s Intellectual Property are valid, binding upon, and
enforceable against the Company and, to the Company’s Knowledge, the other
parties thereto in accordance to its terms. The Company has complied in all
material respects with any intellectual property license, and except as would
not, singly or in the aggregate, have a Material Adverse Effect, the Company is
not in breach nor has received any written notice asserting or threatening any
claim of breach of any intellectual property license, and to the Company’s
Knowledge there is no breach or anticipated breach by any other person to any
intellectual property license. The Company has taken reasonable steps to
protect, maintain and safeguard its Intellectual Property, including the
execution of appropriate nondisclosure and confidentiality agreements.  The
Company has not received a notice (written or otherwise) that any of the
Intellectual Property necessary for the conduct of its business as now conducted
or as described in the SEC Reports has expired, terminated or been abandoned, or
is expected to expire or terminate or be abandoned, within two (2) years from
the date of this Agreement.

 

3.20                        FDA and Related Matters.  The Company and, to the
Company’s Knowledge, others who perform services on the Company’s behalf have
been and are in compliance with all applicable federal, state, local and foreign
laws, rules, regulations, standards, orders and decrees governing their
respective businesses, including without limitation, all regulations promulgated
by the FDA or any other federal, state, local or foreign agencies or bodies
engaged in the regulation of pharmaceuticals or biohazardous substances or
materials, except where noncompliance would not, singly or in the aggregate,
have a Material Adverse Effect; and the Company has not received any notice
citing action or inaction by the Company or others who perform services on the
Company’s behalf that would constitute non-compliance with any applicable
federal, state, local or foreign laws, rules, regulations or standards
excepting, however, such actions that have heretofore been resolved to the
satisfaction of such governmental entity. All tests and preclinical and clinical
studies conducted by or on behalf of the Company were and, if still pending, are
being, conducted in all material respects in accordance with experimental
protocols, procedures and controls generally used by qualified experts in the
preclinical and clinical study of new drugs, and laws and regulations; the
descriptions of the tests and preclinical and clinical studies, and results
thereof, conducted by or on behalf of the Company are accurate in all material
respects; except as disclosed in the SEC Reports, the Company has not received
any written notice or correspondence from the FDA or any foreign, state or local
governmental body exercising comparable authority or any Institutional Review
Board or comparable authority requiring the termination, suspension, material
modification or clinical hold of any tests or preclinical or clinical studies
being conducted by or on behalf of the Company, which termination, suspension,
material modification or

 

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clinical hold would reasonably be expected to have a Material Adverse Effect;
and the Company has not received any written notices or correspondence from
others concerning the termination, suspension, material modification or clinical
hold of any tests or preclinical or clinical studies conducted by others on any
active ingredient contained in the existing products of the Company or the
products described in the SEC Reports as being under development, which
termination, suspension, material modification or clinical hold would reasonably
be expected to have a Material Adverse Effect.

 

3.21                        Compliance with NASDAQ Continued Listing
Requirements.  Except as set forth in the SEC Reports, the Company is, and has
no reason to believe that it will not, upon the issuance of the Securities
hereunder, continue to be, in compliance with the listing and maintenance
requirements for continued listing on NASDAQ in all material respects.  Assuming
the representations and warranties of the Purchasers set forth in Section 4.2
are true and correct in all material respects, the consummation of the
transactions contemplated by the Transaction Documents does not contravene the
rules and regulations of NASDAQ. Except as set forth in the SEC Reports, there
are no proceedings pending or, to the Company’s Knowledge, threatened against
the Company relating to the continued listing of the Common Stock on NASDAQ and
the Company has not received any notice of, nor to the Company’s Knowledge is
there any basis for, the delisting of the Common Stock from NASDAQ.

 

3.22                        Application of Takeover Protections.  The Company
and the Board of Directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s certificate of incorporation (or
similar charter documents) or the laws of its state of incorporation, including
Section 203 of the Delaware General Corporation Law, as well as other laws or
provisions that would prevent the Purchasers or the Company from fulfilling
their obligations or exercising their rights under the Transaction Documents,
including without limitation as a result of the Company’s issuance of the
Securities and the Purchasers’ ownership of the Securities and exercise in full
of the Warrants.

 

3.23                        Fees.  The Company shall be responsible for the
payment of the Placement Agents’ fees. No Person will have, as a result of the
transactions contemplated by the Transaction Documents, any valid right,
interest or claim against or upon any Purchaser for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Company, and no Purchaser shall have any obligation
with respect to any fees or with respect to any claims made by or on behalf of
other Persons for fees of a type contemplated in this Section 3.23 that may be
due in connection with the transactions contemplated by the Transaction
Documents and that arise out of any agreement, arrangement or understanding
entered into by or on behalf of the Company.  The Company shall pay, and hold
each Purchaser harmless against, any liability, loss or expense (including,
without limitation, reasonable attorney’s fees and out-of-pocket expenses)
arising in connection with any such claim for fees arising out of the issuance
of the Securities pursuant to this Agreement.

 

3.24                        No Directed Selling Efforts or General
Solicitation.  Neither the Company nor, to the Company’s Knowledge, any Person
acting on its behalf has conducted any general solicitation or general
advertising (as those terms are used in Regulation D) in connection with the
offer or sale of any of the Securities.

 

3.25                        No Integrated Offering.  Neither the Company nor any
of its Affiliates, nor, to the Company’s Knowledge, any Person acting on its or
their behalf has, directly or indirectly, made any offers or sales of any
Company security or solicited any offers to buy any security, under
circumstances that would adversely affect reliance by the Company on
Section 4(a)(2) under the Securities Act for the exemption from registration for
the transactions contemplated hereby or would require registration of the Shares
under the Securities Act or cause the offering of the Securities pursuant to the
Transaction Documents to be integrated with prior offerings by the Company for
purposes of any applicable law, regulation or stockholder approval provisions,
including, without limitation, under the rules and regulations of any Trading
Market on which the Common Stock is now listed or quoted. Assuming the
satisfaction of all conditions set forth in Section 2.5(b), the sale and
issuance of the Securities hereunder does not contravene the rules and
regulation of any Trading Market on which the Common Stock is now listed or
quoted.

 

3.26                        Private Placement.  Assuming the accuracy of the
Purchasers’ representations and warranties set forth in ARTICLE 4, no
registration under the Securities Act is required for the offer and sale of the
Securities by the Company to the Purchasers as contemplated hereby.

 

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3.27                        Form S-3 Eligibility.  As of the date hereof, the
Company is eligible to register the resale of the Securities for resale by the
Purchaser on Form S-3 promulgated under the Securities Act.

 

3.28                        Investment Company.  The Company is not and, after
giving effect to the offering and sale of the Securities, will not be an
“investment company,” as such term is defined in the Investment Company Act of
1940, as amended.

 

3.29                        Foreign Corrupt Practices.  The Company, nor, to the
best of the Company’s Knowledge, any director, officer, agent, employee or other
Person associated with or acting on behalf of the Company has (A) used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; (B) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; (C) violated or is in violation of any provision of the FCPA;
or (D) made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.

 

3.30                        Indebtedness. Except as disclosed in the SEC
Reports, the Company does not (i) have any outstanding Indebtedness (as defined
below), (ii) is in violation of any term of or in default under any contract,
agreement or instrument relating to any Indebtedness, except where such
violations and defaults would not result, individually or in the aggregate, in a
Material Adverse Effect, or (iii) is a party to any contract, agreement or
instrument relating to any Indebtedness, the performance of which, in the
judgment of the Company’s officers, has or is expected to have a Material
Adverse Effect. For purposes of this Agreement: (x) “Indebtedness” of any Person
means, without duplication (A) all indebtedness for borrowed money, (B) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services (other than trade payables entered into in the ordinary
course of business), (C) all reimbursement or payment obligations with respect
to letters of credit, surety bonds and other similar instruments, (D) all
obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (E) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (F) all monetary obligations under any
leasing or similar arrangement which, in connection with generally accepted
accounting principles, consistently applied for the periods covered thereby, is
classified as a capital lease, (G) all indebtedness referred to in clauses
(A) through (F) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any mortgage,
lien, pledge, charge, security interest or other encumbrance upon or in any
property or assets (including accounts and contract rights) owned by any Person,
even though the Person which owns such assets or property has not assumed or
become liable for the payment of such indebtedness, and (H) all Contingent
Obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (A) through (G) above; and (y) “Contingent Obligation”
means, as to any Person, any direct or indirect liability, contingent or
otherwise, of that Person with respect to any indebtedness, lease, dividend or
other obligation of another Person if the primary purpose or intent of the
Person incurring such liability, or the primary effect thereof, is to provide
assurance to the obligee of such liability that such liability will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such liability will be protected (in whole or in part)
against loss with respect thereto.

 

3.31                        Regulation M Compliance.  The Company has not, and
to the Company’s Knowledge no one acting on its behalf has, (i) taken, directly
or indirectly, any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any
compensation for soliciting purchases of, any of the Securities, or (iii) paid
or agreed to pay to any Person any compensation for soliciting another to
purchase any other securities of the Company.

 

3.32                        Disclosure.  No representation or warranty by the
Company in this Agreement, including the Disclosure Schedules to this Agreement,
if any, and no statement contained in the SEC Reports or any certificate or
other document furnished or to be furnished to the Purchasers pursuant to this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained therein, in
light of the circumstances under which they were made, not misleading.  Except
for the Purchasers which have entered into a written confidentiality and/or
nondisclosure agreement with the Company (a “Confidentiality Agreement”) prior
to the date hereof (such Purchasers, the “Applicable Purchasers”), the Company
confirms that

 

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neither it nor any officers or directors has provided any Purchaser or its
agents or counsel with any information that constitutes or might constitute
material, nonpublic information, other than with respect to the existence of,
and the material terms and conditions of, the transactions contemplated by the
Transaction Documents. The Company understands and confirms that each of the
Purchasers will rely on the foregoing representations in effecting transactions
in securities of the Company.  The Company acknowledges and agrees that no
Purchaser makes or has made any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
ARTICLE 4 hereof.

 

3.33                        Registration Rights. Except as described in the SEC
Reports, the Company has not granted or agreed to grant to any Person any rights
(including “piggy-back” registration rights) to have any securities of the
Company registered with the SEC or any other governmental authority. All such
registration rights have either been satisfied or waived so that no Person shall
have the right to demand the inclusion of any Company securities (other than the
Securities to be issued hereunder) in the Registration Statement.

 

3.34                        Listing and Maintenance Requirements.  The Common
Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and
the Company has taken no action designed to, or which to its knowledge is likely
to have the effect of, terminating the registration of the Common Stock under
the Exchange Act nor has the Company received any notification that the
Commission is contemplating terminating such registration.  Except as set forth
in the SEC Reports, the Company has not, in the 12 months preceding the date
hereof, received notice from any Trading Market on which the Common Stock is or
has been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Trading Market. The Common
Stock is currently eligible for electronic transfer through the Depository Trust
Company or another established clearing corporation (except for any restricted
shares of Common Stock) and the Company is current in payment of the fees to the
Depository Trust Company (or such other established clearing corporation) in
connection with such electronic transfer.

 

3.35                        Transactions With Affiliates and Employees.  Except
as set forth in the SEC Reports, none of the officers or directors of the
Company and, to the Company’s Knowledge, none of the employees of the Company is
presently a party to any transaction with the Company (other than for services
as employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from providing for the borrowing
of money from or lending of money to, or otherwise requiring payments to or from
any officer, director or such employee or, to the Company’s Knowledge, any
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee, stockholder, member or partner, in
each case as such that would be disclosable under Item 404 of the Commission’s
Regulation S-K, other than (i) for: (A) payment of salary or consulting fees for
services rendered, (B) payment of cash retainers for non-employee directors,
(C) reimbursement for expenses incurred on behalf of the Company and (D) other
employee, consultant and non-employee director benefits, including equity
compensation; and (ii) the transactions contemplated by the Transaction
Documents.

 

3.36                        Office of Foreign Assets Control.  Neither the
Company nor, to the Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”).

 

3.37                        Money Laundering.  The operations of the Company are
and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, applicable money laundering
statutes and applicable rules and regulations thereunder (collectively, the
“Money Laundering Laws”), and no Action or Proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
with respect to the Money Laundering Laws is pending or, to the Company’s
Knowledge, threatened.

 

3.38                        No Disqualification Events.  With respect to the
Securities to be offered and sold hereunder in reliance on Rule 506 under the
Securities Act, none of the Company, any of its predecessors, any affiliated
issuer, any director, executive officer, other officer of the Company
participating in the offering hereunder, any beneficial owner of 20% or more of
the Company’s outstanding voting equity securities, calculated on the basis of
voting power, nor any promoter (as that term is defined in Rule 405 under the
Securities Act) connected with the Company in any capacity at the time of sale
(each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is

 

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subject to any of the “Bad Actor” disqualifications described in
Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification
Event”), except for a Disqualification Event covered by Rule 506(d)(2) or
(d)(3). The Company has exercised reasonable care to determine whether any
Issuer Covered Person is subject to a Disqualification Event. The Company has
complied, to the extent applicable, with its disclosure obligations under
Rule 506(e), and has furnished to the Purchasers a copy of any disclosures
provided thereunder.

 

3.39                        Other Covered Persons. Other than the Placement
Agents, the Company is not aware of any person (other than any Issuer Covered
Person) that has been or will be paid (directly or indirectly) remuneration for
solicitation of purchasers in connection with the sale of any Securities.

 

3.40                        Notice of Disqualification Events. The Company will
notify the Purchasers and the Placement Agents in writing, prior to the Closing
Date of (i) any Disqualification Event relating to any Issuer Covered Person and
(ii) any event that would, with the passage of time, become a Disqualification
Event relating to any Issuer Covered Person.

 

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

 

Each Purchaser, for itself and for no other Purchaser, hereby represents and
warrants as of the date hereof and as of the Closing Date to the Company and to
the Placement Agents as follows (unless as of a specific date therein):

 

4.1                               Organization; Authority.  Such Purchaser is
either an individual or an entity duly incorporated or formed, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
formation with full right, corporate, partnership, limited liability company or
similar power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder.  The execution and delivery of the
Transaction Documents and performance by such Purchaser of the transactions
contemplated by the Transaction Documents have been duly authorized by all
necessary corporate, partnership, limited liability company or similar action,
as applicable, on the part of such Purchaser.  Each Transaction Document to
which it is a party has been duly executed by such Purchaser, and when delivered
by such Purchaser in accordance with the terms hereof, will constitute the valid
and legally binding obligation of such Purchaser, enforceable against it in
accordance with its terms, except:  (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

 

4.2                               Purchaser Status.  At the time such Purchaser
was offered the Securities, it was, and as of the date hereof it is, and on each
date on which it exercises the Warrants it will be, an “accredited investor” as
defined in Rule 501 under the Securities Act.  Such Purchaser is not a
broker-dealer registered under Section 15 of the Exchange Act.  Such Purchaser
is acting alone in its determination as to whether to invest in the Securities.
Such Purchaser is not a party to any voting agreements or similar arrangements
with respect to the Securities. Except as expressly disclosed in a Schedule 13D
or Schedule 13G (or amendments thereto) filed by such Purchaser with the
Commission with respect to the beneficial ownership of the Company’s Common
Stock, such Purchaser is not a member of a partnership, limited partnership,
syndicate, or other group for the purpose of acquiring, holding, voting or
disposing of the Securities. Each Purchaser represents and warrants that it
(i) is not and will not become a party to (A) any agreement, arrangement or
understanding with, and has not given any commitment or assurance to, any Person
as to how such Person, if serving as a director or if elected as a director of
the Corporation, will act or vote on any issue or question (a “Voting
Commitment”) or (B) any Voting Commitment that could limit or interfere with
such Person’s ability to comply, if serving as or elected as a director of the
Company, with such Person’s fiduciary duties under applicable law; (ii) is not
and will not become a party to any agreement, arrangement or understanding with
any Person other than the corporation with respect to any direct or indirect
compensation, reimbursement or indemnification in connection with service or
action as a director of the Company.

 

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4.3                               Certain Transactions and Confidentiality.
Other than consummating the transactions contemplated hereunder, such Purchaser
has not, nor has any Person acting on behalf of or pursuant to any understanding
with such Purchaser, directly or indirectly executed any purchases or sales,
including Short Sales, of the securities of the Company during the period
commencing as of the time that such Purchaser was first contacted by the
Company, the Placement Agents or any other Person regarding the transactions
contemplated hereby and ending immediately prior to the date hereof.
Notwithstanding the foregoing, in the case of an Purchaser that is a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s assets, the representation set forth
above shall only apply with respect to the portion of assets managed by the
portfolio manager that made the investment decision to purchase the Shares
covered by this Agreement. The Purchasers, its Affiliates and authorized
representatives and advisors who are aware of the transactions contemplated by
the Transaction Documents, maintained the confidentiality of all disclosures
made to it in connection with such transactions (including the existence and
terms of such transactions). Notwithstanding the foregoing, for avoidance of
doubt, nothing contained herein shall constitute a representation or warranty,
or preclude any actions, with respect to the identification of the availability
of, or securing of, available shares to borrow in order to effect Short Sales or
similar transactions in the future.

 

4.4                               General Solicitation; Pre-Existing
Relationship. Such Purchaser is not purchasing the Securities as a result of any
advertisement, article, notice or other communication regarding the Securities
published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general
solicitation or general advertisement. Such Purchaser also represents that such
Purchaser was contacted regarding the sale of the Units by the Company or the
Placement Agents (or an authorized agent or representative of the Company or the
Placement Agents) with which such Purchaser had a substantial pre-existing
relationship.

 

4.5                               Purchase Entirely for Own Account.  The
Securities to be received by such Purchaser hereunder will be acquired for such
Purchaser’s own account, not as nominee or agent, and not with a view to the
resale or distribution of any part thereof in violation of the Securities Act,
and such Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the same in violation of the
Securities Act without prejudice, however, to such Purchaser’s right at all
times to sell or otherwise dispose of all or any part of such Securities in
compliance with applicable federal and state securities laws.  Nothing contained
herein shall be deemed a representation or warranty by such Purchaser to hold
the Securities for any period of time.

 

4.6                               Experience of Such Purchaser.  Such Purchaser,
either alone or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters so as to be
capable of evaluating the merits and risks of the prospective investment in the
Securities, and has so evaluated the merits and risks of such investment.  Such
Purchaser is able to bear the economic risk of an investment in the Securities
and, at the present time, is able to afford a complete loss of such investment.

 

4.7                               Disclosure of Information.  Such Purchaser has
had an opportunity to receive all information related to the Company requested
by it and to ask questions of and receive answers from the Company and the
Placement Agents regarding the Company, its business and the terms and
conditions of the offering of the Securities.  Such Purchaser acknowledges
receipt of copies of the SEC Reports (or access thereto via EDGAR).  Neither
such inquiries nor any other due diligence investigation conducted by such
Purchaser shall modify, limit or otherwise affect such Purchaser’s right to rely
on the Company’s representations and warranties contained in this Agreement.

 

4.8                               Placement Agents; Required Waiver Disclosure.

 

(a)                                 Such Purchaser hereby acknowledges and
agrees that it has independently evaluated the merits of its decision to
purchase the Shares, and that (i) each Placement Agent is acting solely as
placement agent in connection with the execution, delivery and performance of
the Transaction Documents and is not acting as an underwriter or in any other
capacity and is not and shall not be construed as a fiduciary for such
Purchaser, the Company or any other Person in connection with the execution,
delivery and performance of the Transaction Documents, and (ii) such Purchaser
has not relied on the Placement Agents or their officers, directors, employees,
attorneys or Affiliates with respect to the negotiation, execution or
performance of the Transaction Documents or any representation or warranty made
in, in connection with, or as an inducement to the Transaction Documents.

 

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(b)                                 Such Purchaser hereby acknowledges and
agrees that such Purchaser has received and reviewed the disclosure set forth on
Exhibit G hereto a reasonable time prior to the time that such Purchaser has
agreed to purchase the Units.

 

4.9                               Interested Stockholders.  Each Purchaser that
is an “Interested Stockholder” (as such term is defined in Section 203 of the
General Corporation Law of the State of Delaware) represents and warrants that
either (a) it has been an Interested Stockholder for at least three years prior
to the date hereof or (b) the transaction that resulted in such Purchaser
becoming an Interested Stockholder was approved by the Board of Directors or a
duly authorized committee thereof.

 

4.10                        Restricted Securities.  Such Purchaser understands
that the Securities are “restricted securities” and have not been registered
under the Securities Act and may not be offered, resold, pledged or otherwise
transferred except (i) pursuant to an exemption from registration under the
Securities Act or pursuant to an effective registration statement in compliance
with Section 5 under the Securities Act and (ii) in accordance with all
applicable securities laws of the states of the United States and other
jurisdictions.

 

4.11                        No Rule 506 Disqualifying Activities. Such Purchaser
has not taken any of the actions set forth in, and is not subject to, the
disqualification provisions of Rule 506(d)(1) of the Securities Act.

 

4.12                        Compliance. No part of the funds being used by such
Purchaser to acquire the Securities has been, or shall be, directly or
indirectly derived from, or related to, any activity that may contravene United
States federal or state or non-United States laws or regulations.

 

4.13                        Commissions.  No Person will have, as a result of
the transactions contemplated by the Transaction Documents, any valid right,
interest or claim against the Company or upon any other Purchaser for any
commission, fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of such Purchaser.  Such Purchaser
shall pay, and hold the Company and each other Purchaser harmless against, any
liability, loss or expense (including, without limitation, reasonable attorney’s
fees and out-of-pocket expenses) arising in connection with any such claim for
fees pursuant to any such agreement, arrangement or understanding entered into
by or on behalf of such Purchaser.

 

4.14                        Residency. Such Purchaser is a resident of or an
entity organized under the jurisdiction specified below its address on Exhibit A
hereto.

 

4.15                        ERISA.  If such Purchaser is (1) an employee benefit
plan subject to Title I of ERISA, (2) a plan or account subject to Section 4975
of the Code or (3) an entity deemed to hold “plan assets” of any such plan or
account, such Purchaser hereby represents and warrants, solely for purposes of
assisting the Placement Agents in relying on the exception from fiduciary status
under U.S. Department of Labor Regulations set forth in Section 29 CFR
2510.3-21(c)(1), that a fiduciary acting on its behalf is causing such Purchaser
to enter into the Transaction Documents and the transactions contemplated hereby
and thereby and that such fiduciary:

 

(a)                                 is an entity specified in Section 29 CFR
2510.3-21(c)(1)(i)(A)-(E);

 

(b)                                 is independent (for purposes of Section 29
CFR 2510.3-21(c)(1)) of each Placement Agent;

 

(c)                                  is capable of evaluating investment risks
independently, both in general and with regard to particular transactions and
investment strategies, including such Purchaser’s transactions under the
Transaction Documents;

 

(d)                                 has been advised that, with respect to each
Placement Agent, neither such Placement Agent nor any of its respective
affiliates has undertaken or will undertake to provide impartial investment
advice, or has given or will give advice in a fiduciary capacity, in connection
with such Purchaser’s transactions contemplated by the Transaction Documents;

 

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(e)                                  is a “fiduciary” under Section 3(21)(a) of
ERISA or Section 4975(e)(3) of the Code, or both, as applicable, with respect
to, and is responsible for exercising independent judgment in evaluating, such
Purchaser’s transactions contemplated hereby; and

 

(f)                                   understands and acknowledges that no fees,
compensation arrangements or financial interests provided for in connection with
the transactions contemplated hereby is a fee or other compensation for the
provision of investment advice, and that neither the Placement Agents nor any of
their affiliates, nor any of their respective directors, officers, members,
partners, employees, principals or agents, has received or will receive a fee or
other compensation from such Purchaser or such fiduciary for the provision of
investment advice in connection with such Purchaser’s transactions contemplated
by the Transaction Documents.

 

The Company acknowledges and agrees that the representations contained in
ARTICLE 4 shall not modify, amend or affect such Purchaser’s right to rely on
the Company’s representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction Document or
any other document or instrument executed and/or delivered in connection with
this Agreement or the consummation of the transaction contemplated hereby.

 

ARTICLE 5
REGISTRATION RIGHTS

 

5.1                               Registration Statement.

 

(a)                                 On or prior to the Initial Filing Deadline,
the Company shall prepare and file with the Commission a Registration Statement
covering the resale of all Registrable Securities for an offering to be made on
a continuous basis pursuant to Rule 415. The Registration Statement shall be on
Form S-3 (except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance with the Securities Act) and shall
contain (except if otherwise required pursuant to written comments received from
the Commission upon a review of such Registration Statement) the “Plan of
Distribution” in substantially the form attached hereto as Exhibit H. 
Notwithstanding any other provision of this ARTICLE 5, if the staff of the
Commission does not permit all of the Registrable Securities to be registered on
the initial Registration Statement filed pursuant to this Section 5.1(a) (the
“Initial Registration Statement”) or requires any Purchaser to be named as an
“underwriter”, then the Company shall use commercially reasonable efforts to
persuade the staff of the Commission that the offering contemplated by the
Registration Statement is a valid secondary offering and not an offering “by or
on behalf of the issuer” as defined in Rule 415 and that none of the Purchasers
is an “underwriter”; provided, however, that in no event shall the Company be
required to continue discussions with the staff of the Commission if the Company
reasonably determines that doing so is reasonably likely to cause the Company to
incur liquidated damages pursuant to Section 5.1(d) because of a failure to have
the Initial Registration Statement declared effective prior to the Initial
Effectiveness Deadline. In the event that, despite the Company’s commercially
reasonable efforts to advocate with the Commission for the registration of all
of the Registrable Securities in accordance with the SEC Guidance, including
without limitation, Compliance and Disclosure Interpretation 612.09 and
compliance with the terms of this Section 5.1(a), the staff of the Commission
refuses to alter its position, the Company shall (i) remove from the
Registration Statement such portion of the Registrable Securities (the “Cut Back
Shares”) as determined below and/or (ii) agree to such restrictions and
limitations on the registration and resale of the Registrable Securities as the
staff of the Commission may require to assure the Company’s compliance with the
requirements of Rule 415 (collectively, the “SEC Restrictions”); provided,
however, that the Company shall not agree to name any Purchaser as an
“underwriter” in such Registration Statement without the prior written consent
of such Purchaser; provided, further, that if any such Purchaser refuses to be
named as an underwriter as required by the SEC Restrictions, such Purchaser’s
Registrable Securities shall be removed from the Initial Registration Statement
and such Registrable Securities shall be deemed to constitute Cut Back Shares
and the provisions of this Section 5.1(a) shall apply to such Cut Back Shares. 
Except as provided in the immediately preceding sentence, any cut-back imposed
pursuant to this Section 5.1(a) shall be allocated among the Purchasers on a pro
rata basis by (x) first removing Registrable Securities represented by Unit
Shares on a pro rata basis based on the total number of unregistered Unit Shares
held by such Purchasers and then (y) by removing Registrable Securities
represented by Warrant Shares on a pro rata basis based on the total number of
unregistered Warrant Shares held by such Purchasers, in each case unless the SEC
Restrictions otherwise require or provide or the Purchasers otherwise agree.  In
the event of a cutback hereunder, the Company shall give the

 

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Holder at least three (3) Trading Days prior written notice along with the
calculations as to such Holder’s allotment.  In furtherance of the foregoing,
each Purchaser shall promptly notify the Company when it has sold substantially
all of its Registrable Securities covered by the Initial Registration Statement
(or any Additional Registration Statement (as defined below)) so as to enable
the Company to determine whether it can file one or more additional registration
statements covering the Cut Back Shares and the Company agrees that it shall
file one or more additional Registration Statements (each, an “Additional
Registration Statement”) as promptly as possible, and in any event on or prior
to the applicable Additional Filing Deadline, successively using its
commercially reasonable efforts to register on each such Additional Registration
Statement the maximum number of remaining Cut Back Shares that continue to
constitute Registrable Securities until all of the Cut Back Shares that continue
to constitute Registrable Securities have been registered with the SEC.

 

(b)                                 The Company shall use its commercially
reasonable efforts to cause each Registration Statement to be declared effective
by the Commission as promptly as possible after the filing thereof, but in any
event prior to the applicable Effectiveness Deadline, and shall use commercially
reasonable efforts to keep the Registration Statement continuously effective
under the Securities Act until the earlier of (i) the date that all Registrable
Securities covered by such Registration Statement have been sold or can be sold
publicly without restriction or limitation under Rule 144 (including, without
limitation, the requirement to be in compliance with Rule 144(c)(1)) or (ii) the
date that is two (2) years following the Closing Date (the “Effectiveness
Period”).  Not later than two Trading Days after a Registration Statement is
declared effective, the Company shall file a prospectus supplement for any
Registration Statement to the extent required pursuant to Rule 424.

 

(c)                                  The Company shall notify the Purchasers in
writing promptly (and in any event within two Trading Days) after receiving
notification from the Commission that a Registration Statement has been declared
effective.

 

(d)                                 Should an Event (as defined below) occur,
then upon the occurrence of such Event and on every monthly anniversary thereof
until the applicable Event is cured, the Company shall pay to each Purchaser an
amount in cash, as liquidated damages and not as a penalty, equal to one percent
(1.0%) of the aggregate Unit Purchase Price of the Registrable Securities then
held by the Purchaser, subject to adjustment as provided below (which remedy
shall be exclusive of any other remedies available under this Agreement or under
applicable law); provided, however, that the total amount of payments pursuant
to this Section 5.1(d) shall not exceed, when aggregated with all such payments
paid to all Purchasers, ten percent (10%) of the aggregate Unit Purchase Price
hereunder. The payments to which a Purchaser shall be entitled pursuant to this
Section 5.1(d) are referred to herein as “Event Payments.” Any Event Payments
payable pursuant to the terms hereof shall apply on a pro rated basis for any
portion of a month prior to the cure of an Event. In the event the Company fails
to make Event Payments in a timely manner, such Event Payments shall bear
interest at the rate of one percent (1.0%) per month (prorated for partial
months) until paid in full. All pro rated calculations made pursuant to this
paragraph shall be based upon the actual number of days in such pro rated month.
The parties agree that the Company will not be liable for any Event Payments
under this Section 5.1(d) with respect to any period after the expiration of the
Effectiveness Period.  The parties further agree that Company will not be liable
for any Event Payments under this Section 5.1(d) with respect to (i) any Warrant
Shares or other shares of Common Stock constituting Registrable Securities are
not then issued and outstanding and (ii) any Cut Back Shares that are removed
from a Registration Statement pursuant to Section 5.1(a); accordingly, any Event
Payments shall be calculated, as to each Purchaser, to apply only to the
percentage of such Purchaser’s Registrable Securities that are both (x) then
issued and outstanding and (y) permitted in accordance with SEC Guidance to be
included in such Registration Statement.  Notwithstanding the foregoing, the
applicable Filing Deadline or Effectiveness Deadline for a Registration
Statement shall be extended without Event Payments hereunder in the event that
the Company’s failure to file or obtain the effectiveness of such Registration
Statement on a timely basis results from (i) the failure of any Purchaser, other
than a Purchaser that is also a director or officer of the Company, to timely
provide the Company with information reasonably requested by the Company and
necessary to complete the Registration Statement in accordance with the
requirements of the Securities Act or (ii) events or circumstances that are not
in any way attributable to the Company’s actions or inactions, including, but
not limited to, the failure of any Purchaser, other than a Purchaser that is
also a director or officer of the Company, to promptly notify the Company when
it has sold substantially all of its Registrable Securities covered by the
Initial Registration Statement or any Additional Registration Statement or to
otherwise comply with the terms of this Agreement, and in any event, no
Purchaser causing the failure described in (i) or (ii), above shall be entitled
to Event Payments relating to the failure caused by such Purchaser.

 

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For such purposes, each of the following shall constitute an “Event”:

 

(x)                                 a Registration Statement is not filed on or
prior to its Filing Deadline or is not declared effective on or prior to its
Effectiveness Deadline; and

 

(y)                                 except as provided for in
Section 5.1(e) (the “Excluded Events”), after the Effective Date of a
Registration Statement and through the end of the Effectiveness Period, a
Purchaser is not permitted to sell Registrable Securities under the Registration
Statement (or a subsequent Registration Statement filed in replacement thereof)
for any reason (other than the fault of such Purchaser).

 

(e)                                  Notwithstanding anything in this Agreement
to the contrary, the Company may, by written notice to the Purchasers, suspend
sales under a Registration Statement after the Effective Date thereof and/or
require that the Purchasers immediately cease the sale of shares of Common Stock
pursuant thereto and/or defer the filing of any Additional Registration
Statement if the Company is engaged in a material merger, acquisition or sale or
any other pending development that the Company believes may be material, and the
Board of Directors determines in good faith, by appropriate resolutions, that,
as a result of such activity, (A) it would be materially detrimental to the
Company (other than as relating solely to the price of the Common Stock) to
maintain a Registration Statement at such time or (B) it is in the best
interests of the Company to suspend sales under such registration at such time.
Upon receipt of such notice, each Purchaser agrees to immediately discontinue
any sales of Registrable Securities pursuant to such Registration Statement
until such Purchaser is advised in writing by the Company that the current
Prospectus or amended Prospectus, as applicable, may be used. In no event,
however, shall this right be exercised to suspend sales beyond the period during
which (in the good faith determination of the Board of Directors) the failure to
require such suspension would be materially detrimental to the Company. The
Company’s rights under this Section 5.1(e) may be exercised for a period of no
more than 20 Trading Days at a time with a subsequent permitted trading window
of at least 90 Trading Days, and not more than two times in any twelve-month
period. Immediately after the end of any suspension period under this
Section 5.1(e), the Company shall take all necessary actions (including filing
any required supplemental prospectus) to restore the effectiveness of the
applicable Registration Statement and the ability of the Purchasers to publicly
resell their Registrable Securities pursuant to such effective Registration
Statement.

 

5.2                               Registration Procedures. In connection with
the Company’s registration obligations hereunder, the Company shall:

 

(a)                                 Not less than five Trading Days prior to the
filing of a Registration Statement or any related Prospectus or any amendment or
supplement thereto, furnish via email to those Purchasers or their counsels who
have supplied the Company with email addresses copies of all such documents
proposed to be filed, which documents (other than any document that is
incorporated or deemed to be incorporated by reference therein) will be subject
to the review of such Purchasers. The Company shall reflect in each such
document when so filed with the Commission such comments regarding the
Purchasers and the plan of distribution as the Purchasers may reasonably and
promptly propose no later than two Trading Days after the Purchasers have been
so furnished with copies of such documents as aforesaid.

 

(b)                                 (i) Subject to Section 5.1(e), prepare and
file with the Commission such amendments, including post-effective amendments,
to each Registration Statement and the Prospectus used in connection therewith
as may be necessary to keep the Registration Statement continuously effective,
as to the applicable Registrable Securities for the Effectiveness Period and
prepare and file with the Commission such additional Registration Statements in
order to register for resale under the Securities Act all of the Registrable
Securities; (ii) cause the related Prospectus to be amended or supplemented by
any required Prospectus supplement, and as so supplemented or amended to be
filed pursuant to Rule 424; and (iii) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by the Registration Statement
during the applicable period in accordance with the intended methods of
disposition by the Purchasers thereof set forth in the Registration Statement as
so amended or in such Prospectus as so supplemented.

 

(c)                                  Notify the Purchasers as promptly as
reasonably possible, and if requested by the Purchasers, confirm such notice in
writing no later than two Trading Days thereafter, of any of the following
events:

 

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(i) the Commission notifies the Company whether there will be a “review” of any
Registration Statement; (ii) any Registration Statement or any post-effective
amendment is declared effective; (iii) the Commission issues any stop order
suspending the effectiveness of any Registration Statement or initiates any
Proceedings for that purpose; (iv) the Company receives notice of any suspension
of the qualification or exemption from qualification of any Registrable
Securities for sale in any jurisdiction, or the initiation or threat of any
Proceeding for such purpose; (v) the financial statements included in any
Registration Statement become ineligible for inclusion therein; or (vi) the
Company becomes aware that any Registration Statement or Prospectus or other
document contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

 

(d)                                 Use reasonable best efforts to avoid the
issuance of or, if issued, obtain the withdrawal of (i) any order suspending the
effectiveness of any Registration Statement, or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, as soon as possible.

 

(e)                                  If requested by a Purchaser, provide such
Purchaser, without charge, at least one conformed copy of each Registration
Statement and each amendment thereto, including financial statements and
schedules, and all exhibits to the extent requested by such Person (including
those previously furnished or incorporated by reference) promptly after the
filing of such documents with the Commission; provided, that the Company shall
have no obligation to provide any document pursuant to this clause that is
available on the Commission’s EDGAR system.

 

(f)                                   Promptly deliver to each Purchaser,
without charge, as many copies of the Prospectus or Prospectuses (including each
form of prospectus) and each amendment or supplement thereto as such Persons may
reasonably request. The Company hereby consents to the use of such Prospectus
and each amendment or supplement thereto by each of the selling Purchasers in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus and any amendment or supplement thereto to the extent permitted
by federal and state securities laws and regulations.

 

(g)                                  Prior to any resale of Registrable
Securities by a Purchaser, use commercially reasonable best efforts to register
or qualify or cooperate with the selling Purchasers in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Purchaser requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective for so long as required, but
not to exceed the duration of the Effectiveness Period, and to do any and all
other acts or things reasonably necessary or advisable to enable the disposition
in such jurisdictions of the Registrable Securities covered by a Registration
Statement; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.

 

(h)                                 Use reasonable best efforts to cause all
Registrable Securities covered by a Registration Statement to be listed on the
Trading Market;

 

(i)                                     If requested by the Purchasers,
cooperate with the Purchasers to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be delivered to a
transferee pursuant to a Registration Statement, which certificates shall be
free, to the extent permitted by this Agreement and under law, of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Purchasers may reasonably
request.

 

(j)                                    Upon the occurrence of any event
described in Section 5.2(c)(iii)-(vi), as promptly as reasonably practicable,
prepare a supplement or amendment, including a post-effective amendment, to the
Registration Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any
other required document so that, as thereafter delivered, neither the
Registration Statement nor such Prospectus will contain an untrue statement of a
material fact or omit to state a

 

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material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

 

(k)                                 It shall be a condition precedent to the
obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of any particular Purchaser
that such Purchaser furnish to the Company a completed Selling Stockholder
Questionnaire in the form proffered by the Company (the “Selling Stockholder
Questionnaire”) and such other information regarding itself, the Registrable
Securities and other shares of Common Stock held by it and the intended method
of disposition of the Registrable Securities held by it (if different from the
Plan of Distribution set forth on Exhibit H hereto) as shall be reasonably
required to effect the registration of such Registrable Securities and shall
complete and execute such documents in connection with such registration as the
Company may reasonably request.

 

(l)                                     The Company shall comply with all
applicable rules and regulations of the Commission under the Securities Act and
the Exchange Act, including, without limitation, Rule 172 under the Securities
Act, file any final Prospectus, including any supplement or amendment thereof,
with the Commission pursuant to Rule 424 under the Securities Act, promptly
inform the Purchasers in writing if, at any time during the Effectiveness
Period, the Company does not satisfy the conditions specified in Rule 172 and,
as a result thereof, the Purchasers are required to make available a Prospectus
in connection with any disposition of Registrable Securities and take such other
actions as may be reasonably necessary to facilitate the registration of the
Registrable Securities hereunder.

 

(m)                             Not identify any Purchaser as an underwriter
without its prior written consent in any public disclosure or filing with the
Commission or any Trading Market and any Purchaser being deemed an underwriter
by the Commission shall not relieve the Company of any obligations it has under
this Agreement; provided, however, that the foregoing shall not prohibit the
Company from including the disclosure found in the “Plan of Distribution”
section attached hereto as Exhibit H in the Registration Statement. In addition,
and notwithstanding anything to the contrary contained herein, if the Company
has received a comment by the Commission requiring an Purchaser to be named as
an underwriter in the Registration Statement (which notwithstanding the
reasonable best efforts of the Company is not withdrawn by the Commission) and
such Purchaser refuses to be named as an underwriter in the Registration
Statement, such Purchaser’s Registrable Securities shall be removed from the
Registration Statement, such Registrable Securities shall be deemed to
constitute Cut Back Shares and the Purchaser shall not be entitled to any Event
Payments with respect to such Registration Statement.

 

5.3                               Registration Expenses. The Company shall pay
all fees and expenses incident to the performance of or compliance with
ARTICLE 5 of this Agreement by the Company, including without limitation (a) all
registration and filing fees and expenses, including without limitation those
related to filings with the Commission, any Trading Market, and in connection
with applicable state securities or Blue Sky laws, (b) printing expenses
(including without limitation expenses of printing certificates for Registrable
Securities), (c) messenger, telephone and delivery expenses, (d) fees and
disbursements of counsel for the Company, (e) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement, (f) all listing fees to be paid by
the Company to the Trading Market and (g) reasonable and reasonably-documented
fees and disbursements, not to exceed $15,000 in the aggregate, of one counsel
for the Purchasers.  In no event shall the Company be responsible for any
underwriting, broker or similar fees or commissions of any Purchaser or, except
to the extent provided for above or in the Transaction Documents, any legal fees
or other costs of the Purchasers.

 

5.4                               Indemnification.

 

(a)                                 Indemnification by the Company. The Company
shall, notwithstanding any termination of this Agreement, indemnify and hold
harmless each Purchaser, the officers, directors, partners, members, agents and
employees of each of them, each Person who controls any such Purchaser (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, partners, members, agents and employees of
each such controlling Person, to the fullest extent permitted by applicable law,
from and against any and all Losses, as incurred, arising out of or relating to
any violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any other law, including, without limitation, any state securities
law, or any rule or regulation thereunder relating to the offer or sale of the
Registrable Securities, any untrue or alleged untrue

 

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statement of a material fact contained in the Registration Statement, any
Prospectus or in any amendment or supplement thereto, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that (A) such untrue statements, alleged untrue
statements, omissions or alleged omissions are based solely upon information
regarding such Purchaser furnished in writing to the Company by such Purchaser
for use therein, or to the extent that such information relates to such
Purchaser or such Purchaser’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved by such Purchaser expressly
for use in the Registration Statement, or (B) with respect to any Prospectus, if
the untrue statement or omission of material fact contained in such Prospectus
was corrected on a timely basis in the Prospectus, as then amended or
supplemented, if such corrected prospectus was timely made available by the
Company to the Purchaser, and the Purchaser seeking indemnity hereunder was
advised in writing not to use the incorrect prospectus prior to the use giving
rise to Losses.

 

(b)                                 Indemnification by Purchasers. Each
Purchaser shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each Person who controls
the Company (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses (as determined by a court of
competent jurisdiction in a final judgment not subject to appeal or review)
arising solely out of any untrue statement of a material fact contained in the
Registration Statement, any Prospectus, or any form of prospectus, or in any
amendment or supplement thereto, or arising out of or relating to any omission
of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, but only to the extent that such untrue statement or
omission is contained in any information so furnished by such Purchaser in
writing to the Company specifically for inclusion in such Registration Statement
or such Prospectus or to the extent that (i) such untrue statements or omissions
are based solely upon information regarding such Purchaser furnished to the
Company by such Purchaser in writing expressly for use in the Registration
Statement or Prospectus, or to the extent that such information relates to such
Purchaser or such Purchaser’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved by such Purchaser expressly
for use in the Registration Statement (it being understood that the information
provided by the Purchaser to the Company in the Questionnaire and the Plan of
Distribution set forth on Exhibit H, as the same may be modified by such
Purchaser constitutes information reviewed and expressly approved by such
Purchaser in writing expressly for use in the Registration Statement), such
Prospectus or such form of Prospectus or in any amendment or supplement thereto.
In no event shall the liability of any selling Purchaser hereunder be greater in
amount than the dollar amount of the net proceeds received by such Purchaser
upon the sale of the Registrable Securities giving rise to such indemnification
obligation.

 

(c)                                  Conduct of Indemnification Proceedings. If
any Proceeding shall be brought or asserted against any Person entitled to
indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall
promptly notify the Person from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses incurred in connection with
defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that it
shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such failure
shall have proximately and materially adversely prejudiced the Indemnifying
Party.

 

An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (i) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (ii) the Indemnifying Party shall have failed within 15 days of
receiving notification of a Proceeding from an Indemnified Party to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; (iii) any counsel engaged by the
applicable Indemnifying Party shall fail to timely commence or diligently
conduct the defense of any such claim and such failure has materially prejudiced
(or, in the reasonable judgment of the Indemnified Party, is in danger of
materially prejudicing) the outcome of the applicable claim; or (iv) such
Indemnified Party shall have been advised by counsel that a conflict of interest
is

 

27

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likely to or may exist between the applicable Indemnifying Party and Indemnified
Party or that there may be one or more different or additional defenses, claims,
counterclaims or causes of action available to such Indemnified Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense thereof
and the reasonable fees and expenses of separate counsel shall be at the expense
of the Indemnifying Party). It being understood, however, that the Indemnifying
Party shall not, in connection with any one such Proceeding (including separate
Proceedings that have been or will be consolidated before a single judge) be
liable for the fees and expenses of more than one separate firm of attorneys at
any time for all Indemnified Parties, which firm shall be appointed by a
majority of the Indemnified Parties. The Indemnifying Party shall not be liable
for any settlement of any such Proceeding effected without its written consent,
which consent shall not be unreasonably withheld. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.

 

All reasonable fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within 20 Trading
Days of written notice thereof to the Indemnifying Party (regardless of whether
it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined (not subject to appeal) that such
Indemnified Party is not entitled to indemnification hereunder).

 

(d)                                 Contribution. If a claim for indemnification
under Section 5.4(a) or (b) is unavailable to an Indemnified Party (by reason of
public policy or otherwise), then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5.4(c), any reasonable attorneys’ or
other reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.

 

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5.4(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5.4(d), no Purchaser shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the proceeds actually received by such Purchaser from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. 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.

 

The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties, including pursuant to Section 6.6 hereof.

 

5.5                               Dispositions. Each Purchaser agrees that it
will comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
the Registration Statement and shall sell its Registrable Securities that it
sells pursuant to the Registration Statement in accordance with the Plan of
Distribution set forth in the Prospectus. Each Purchaser further agrees that,
upon receipt of a notice from the Company of the occurrence of any event of the
kind described in Section 5.2(c)(iii)-(vi), such Purchaser

 

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will discontinue disposition of such Registrable Securities under the
Registration Statement until such Purchaser is advised in writing by the Company
that the use of the Prospectus, or amended Prospectus, as applicable, may be
used. The Company may provide appropriate stop orders to enforce the provisions
of this paragraph. Each Purchaser, severally and not jointly with the other
Purchasers, agrees that the removal of the restrictive legend from certificated
or uncertificated Shares as set forth in the Section 6.1 is predicated upon the
Company’s reliance that the Purchaser will comply with the provisions of this
subsection.

 

5.6                               No Piggyback on Registrations. Neither the
Company nor any of its security holders (other than the Purchasers in such
capacity pursuant hereto) may include securities of the Company in the
Registration Statement other than the Registrable Securities.   The Company
shall not file any other registration statements, other than any registration
statements on Form S-4 or Form S-8 (each as promulgated under the Securities
Act), prior to the Effective Date of the Initial Registration Statement,
provided that this Section 5.6 shall not prohibit the Company from filing
amendments to registration statements filed prior to the date of this Agreement.

 

5.7                               Amendments; Waivers.  Notwithstanding anything
in this Agreement to the contrary, the provisions of this ARTICLE 5 may be
amended or waived (either generally or in a particular instance, either
retroactively or prospectively and either for a specified period of time or
indefinitely), with the written consent of (i) the Company and (ii) the
Purchaser or Purchasers holding at least a majority of the then outstanding
Registrable Securities. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions of this ARTICLE 5 with respect to a matter that
relates exclusively to the rights of Purchasers and that does not directly or
indirectly affect the rights of other Purchasers may be given by Purchasers of
all of the Registrable Securities to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be amended,
modified or supplemented except in accordance with the provisions of the
immediately preceding sentence.

 

ARTICLE 6
OTHER AGREEMENTS OF THE PARTIES

 

6.1                               Transfer Restrictions.

 

(a)                                 The Securities may only be disposed of in
compliance with state and federal securities laws, and each Purchaser agrees
that it will sell, transfer or otherwise dispose of the Securities only in
compliance with all applicable state and federal securities laws, and, as
applicable, in accordance with the requirements of Section 5.5 hereof. In
connection with any transfer of Securities other than pursuant to an effective
registration statement under the Securities Act or Rule 144, to the Company or
to an Affiliate of a Purchaser, the Company may require the transferor thereof
to provide to the Company an opinion of counsel selected by the transferor and
reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Securities under the
Securities Act.

 

(b)                                 The Purchasers agree to the imprinting, so
long as is required by this Section 6.1, of a legend on any of the Securities,
whether in certificated or uncertificated form, in substantially the following
forms, as applicable:

 

[NEITHER THIS WARRANT, NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
(COLLECTIVELY, THE “SECURITIES”), HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES OR
BLUE SKY LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES OR BLUE SKY LAWS, PURSUANT TO REGISTRATION OR QUALIFICATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR
THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE
COMPANY MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY PROPOSED

 

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TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES OR BLUE SKY LAWS. THIS WARRANT IS SUBJECT TO THE TRANSFER
RESTRICTIONS SET FORTH HEREIN AND IN A SECURITIES PURCHASE AGREEMENT, DATED AS
OF SEPTEMBER 25, 2017, AND AS AMENDED FROM TIME TO TIME, COPIES OF WHICH ARE
AVAILABLE WITH THE SECRETARY OF THE COMPANY.  THIS SECURITY MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR
OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS
DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH
SECURITIES.]

 

[THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS.
THIS SECURITY IS SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT
AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES OR BLUE
SKY LAWS, PURSUANT TO REGISTRATION OR QUALIFICATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS
OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE COMPANY MAY REQUIRE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY
TO THE EFFECT THAT ANY PROPOSED TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS. THIS SECURITY IS
SUBJECT TO THE TRANSFER RESTRICTIONS SET FORTH IN A SECURITIES PURCHASE
AGREEMENT, DATED AS OF SEPTEMBER 25, 2017, AND AS AMENDED FROM TIME TO TIME,
COPIES OF WHICH ARE AVAILABLE WITH THE SECRETARY OF THE COMPANY.  THIS SECURITY
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED
INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN
SECURED BY SUCH SECURITIES.]

 

In addition, if any Purchaser is an Affiliate of the Company, the Warrants and
the Shares issued to such Purchaser shall bear a customary “affiliates” legend.

 

The Company acknowledges and agrees that a Purchaser may from time to time
pledge pursuant to a bona fide margin agreement with a registered broker-dealer
or grant a security interest in some or all of the Securities to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and, if required under the terms of such arrangement, such
Purchaser may transfer pledged or secured Securities to the pledgees or secured
parties. Such a pledge or transfer would not be subject to approval of the
Company and no legal opinion of legal counsel of the pledgee, secured party or
pledgor shall be required in connection therewith.  Further, no notice shall be
required of such pledge. At the applicable Purchaser’s expense, the Company
will, subject to Section 8.6 hereof, execute and deliver such reasonable
documentation as a pledgee or secured party of Securities may reasonably request
in connection with a pledge or transfer of the Securities, including, if the
Securities are subject to registration pursuant to ARTICLE 5, the preparation
and filing of any required prospectus supplement under Rule 424(b)(3) under the
Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of Selling Stockholders thereunder; provided,
however, that nothing in this provision will require the Company to
post-effectively amend any Registration Statement to amend the list of Selling
Stockholders included therein.

 

(c)                                  Instruments, whether certificated or
uncertificated, evidencing the Unit Shares and Warrant Shares shall not contain
any legend (including the legend set forth in Section 6.1(b) hereof), (i) while
a registration statement (including the Registration Statement) covering the
resale of such security is effective under the Securities Act, (ii) if such Unit
Shares or Warrant Shares are eligible for sale under Rule 144, without the
requirement for the Company to be in compliance with the current public
information required under Rule 144 as to

 

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such Unit Shares and Warrant Shares and without volume or manner-of-sale
restrictions, (iii) following any sale of such Unit Shares or Warrant Shares
pursuant to Rule 144 or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Commission).  Upon request by any
Purchaser, following such time as a legend is no longer required under this
Section 6.1(c), the Company shall cause its counsel to issue a legal opinion to
the Transfer Agent (if required by the Transfer Agent) to effect the removal of
the legend hereunder from any Shares.  If all or any portion of a Warrant is
exercised at a time when there is an effective registration statement to cover
the resale of the Warrant Shares, or if such the Warrant Shares issuable upon
exercise of such Warrant may be sold under Rule 144 without limitation or
restriction and the Company is then in compliance with the current public
information required under Rule 144, or if such Warrant Shares may be sold under
Rule 144 without limitation or restriction and without the requirement for the
Company to be in compliance with the current public information required under
Rule 144 as to such Warrant Shares or if such legend is not otherwise required
under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission) then
such Warrant Shares shall be issued free of all legends.  The Company agrees
that following such time as a legend is no longer required under this
Section 6.1(c), no later than three Trading Days following the delivery by a
Purchaser to the Company of all of (i) an instrument, whether certificated or
uncertificated, representing Unit Shares or Warrant Shares, as the case may be,
issued with a restrictive legend, (ii) a written request addressed to the
Company that such restrictive legend be removed, and (iii) customary broker and
representation letters in form and substance reasonably satisfactory to the
Company (the date that all of such foregoing information and documentation is
delivered to the Company by a Purchaser, the “Removal Request Date” and such
third Trading Day thereafter, the “Legend Removal Date”), the Company will
deliver or cause to be delivered to such Purchaser an instrument, certificated
or uncertificated as directed by such Purchaser, representing such Shares that
is free from all restrictive and other legends. The Company may not make any
notation on its records or give instructions to the Transfer Agent that enlarge
the restrictions on transfer set forth in this Section 6.1(c). Securities
subject to legend removal hereunder shall, unless otherwise directed by a
Purchaser, be transmitted by the Transfer Agent to the Purchaser by crediting
the account of the Purchaser’s prime broker with the Depository Trust Company
System as directed by such Purchaser.

 

(d)                                 In addition to a Purchaser’s other available
remedies, if the Company shall fail for any reason (other than failure of such
Purchaser to comply with the provisions set forth in this Section 6.1) to
deliver any Shares without a restrictive legend by the Legend Removal Date, and
if on or after the Legend Removal Date such Purchaser purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by such Purchaser of any portion of such Shares that such
Purchaser anticipated receiving without legend by the Legend Removal Date (a
“Buy-In”), then the Company shall, within two (2) Trading Days after such
Purchaser’s request and in such Purchaser’s discretion, either: (i) pay cash to
such Purchaser in an amount equal to such Purchaser’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased by such Purchaser (the “Buy-In Price”), at which point the Company’s
obligation to deliver such unlegended Shares shall terminate, or (ii) promptly
honor its obligation to deliver to such Purchaser such unlegended Shares as
provided above and pay cash to such Purchaser in an amount equal to the excess
(if any) of the Buy-In Price over the product of (A) such number of Shares,
times (B) the Fair Market Value (as defined in the Warrant) of one share of
Common Stock as of the Removal Request Date.

 

6.2                               Furnishing of Information; Public
Information.  In order to enable the Purchasers to sell Shares under Rule 144,
for a period of one year from the Closing, the Company covenants to use
commercially reasonable efforts to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be
filed by the Company after the date hereof pursuant to Section 13(a) or 15(d) of
the Exchange Act. During such one year period, if the Company is not required to
file reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will
prepare and furnish to the Holders and make publicly available in accordance
with Rule 144(c) promulgated under the Securities Act annual and quarterly
financial statements, together with a discussion and analysis of such financial
statements in form and substance substantially similar to those that would
otherwise be required to be included in reports required by Section 13(a) or
15(d) of the Exchange Act, as well as any other information required thereby, in
the time period that such filings would have been required to have been made
under the Exchange Act.

 

6.3                               Integration.  The Company shall not sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that would be
integrated with the offer or sale of the Securities in a manner that would
require the registration under the Securities Act of the sale of

 

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the Securities or that would be integrated with the offer or sale of the
Securities for purposes of the rules and regulations of NASDAQ such that it
would require shareholder approval prior to the closing of such other
transaction unless shareholder approval is obtained before the closing of such
subsequent transaction.  The Purchasers shall take no action to become a group
such that any transactions contemplated by this Agreement would require
shareholder approval prior to Closing.

 

6.4                               Securities Laws Disclosure; Publicity.  The
Company shall (a) by 4:15 p.m. (New York City time) on the Trading Day
immediately following the date hereof, issue a press release disclosing the
material terms of the transactions contemplated hereby, and (b) file a Current
Report on Form 8-K, including the Transaction Documents as exhibits thereto,
with the Commission within the time required by the Exchange Act. Each
Purchaser, severally and not jointly with the other Purchasers, covenants that
until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company as described in this Section 6.4 (or such later time as
may be contemplated by the Confidentiality Agreement such Purchaser previously
entered into with the Company), such Purchaser will maintain the confidentiality
of all disclosures made to it in connection with this transaction (including the
existence and terms of this transaction), except that such Purchaser may
disclose the terms to its financial, accounting, legal and other advisors (with
such disclosure subject, in the case of an Applicable Purchaser, to the
Confidentiality Agreement such Applicable Purchaser previously entered into with
the Company). From and after the issuance of such press release, the Company
represents to the Purchasers (other than to the Applicable Purchasers) that it
shall have publicly disclosed all material, non-public information delivered to
any of the Purchasers (other than to the Applicable Purchasers) by the Company
or any of its officers, directors, employees or agents in connection with the
transactions contemplated by the Transaction Documents; provided, however, that,
in the case of the Applicable Purchasers, the Company represents to the
Applicable Purchasers that it shall have publicly disclosed all material,
non-public information delivered to any of the Applicable Purchasers by the
Company or any of its officers, directors, employees or agents in connection
with the transactions contemplated by the Transaction Documents by no later than
4:15 p.m. (New York City time) on September 28, 2017. In addition, effective
upon the issuance of such press release, the Company acknowledges and agrees
that any and all confidentiality or similar obligations under any agreement,
whether written or oral, between the Company or any of its officers, directors,
agents, employees or Affiliates on the one hand, and any of the Purchasers
(other than the Applicable Purchasers) or any of their Affiliates on the other
hand, shall terminate. Moreover, each Applicable Purchaser acknowledges and
agrees that any and all confidentiality or similar obligations under the
Confidentiality Agreement such Applicable Purchaser previously entered into with
the Company shall continue before and after the issuance of the issuance of such
press release pursuant to the terms of such Confidentiality Agreement. 
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of any Purchaser, or include the name of any Purchaser in any filing with the
Commission or any regulatory agency or Trading Market, without the prior written
consent of such Purchaser, except: (a) as required by federal securities laws in
connection with (i) any Registration Statement contemplated by this Agreement
and (ii) the filing of final Transaction Documents with the Commission and
(b) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under this clause (b).

 

6.5                               Use of Proceeds.  The Company shall use the
net proceeds from the sale of the Securities hereunder for funding research and
development and its other operations, or for working capital and other general
corporate purposes, and shall not use any such proceeds in violation of FCPA or
OFAC regulations.

 

6.6                               Indemnification of Purchasers. Subject to the
provisions of this Section 6.6, the Company will indemnify and hold each
Purchaser and its directors, officers, shareholders, members, partners,
employees and agents (and any other Persons with a functionally equivalent role
of a Person holding such titles notwithstanding a lack of such title or any
other title), each Person who controls such Purchaser (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, shareholders, agents, members, partners or employees (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title) of such
controlling Persons (each, a “Purchaser Party”) harmless from any and all Losses
that any such Purchaser Party may suffer or incur as a result of or relating to
(a) any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other Transaction
Documents or (b) any action instituted against the Purchaser Parties in any
capacity, or any of them or their respective Affiliates, by any stockholder of
the Company who is not an Affiliate of such Purchaser Parties, with respect to
any of the transactions contemplated by the Transaction Documents (unless such
action is based upon a breach of such Purchaser Party’s representations,
warranties or covenants under the

 

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Transaction Documents or any agreements or understandings such Purchaser Parties
may have with any such stockholder or any violations by such Purchaser Parties
of state or federal securities laws or any conduct by such Purchaser Parties
which constitutes fraud, gross negligence, willful misconduct or malfeasance of
such Purchaser Party).  If any action shall be brought against any Purchaser
Party in respect of which indemnity may be sought pursuant to this Agreement,
such Purchaser Party shall promptly notify the Company in writing, and the
Company shall have the right to assume the defense thereof with counsel of its
own choosing reasonably acceptable to the Purchaser Party.  Any Purchaser Party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Purchaser Party except to the extent that
(i) the employment thereof has been specifically authorized by the Company in
writing, (ii) the Company has failed after a reasonable period of time to assume
such defense and to employ counsel or (iii) in such action there is, in the
reasonable opinion of counsel, a material conflict on any material issue between
the position of the Company and the position of such Purchaser Party, in which
case the Company shall be responsible for the reasonable fees and expenses of no
more than one such separate counsel.  The Company will not be liable to any
Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party
effected without the Company’s prior written consent, which shall not be
unreasonably withheld or delayed; or (z) to the extent, but only to the extent
that a loss, claim, damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or agreements made
by such Purchaser Party in this Agreement or in the other Transaction
Documents.  No Purchaser shall be liable for the indemnification obligations of
any other Purchaser and no Purchaser’s liability shall exceed the purchase price
paid for the Securities pursuant to this Agreement. The indemnification required
by this Section 6.6 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are
received or are incurred.  The indemnity agreements contained herein shall be in
addition to any cause of action or similar right of any Purchaser Party against
the Company or others and any liabilities the Company may be subject to pursuant
to law.

 

6.7                               Reservation of Common Stock. The Company has
reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive rights, a sufficient number of shares of Common Stock
for the purpose of enabling the Company to (i) issue the Unit Shares pursuant to
this Agreement and (ii) to issue the Warrant Shares upon exercise of the
Warrants (the “Required Minimum”). If, on any date, the number of authorized but
unissued (and otherwise unreserved) shares of Common Stock is less than the
Required Minimum on such date, then, not later than the Company’s next annual
meeting of stockholders occurring on or after the 60th day following such date,
the Board of Directors shall use commercially reasonable efforts to amend the
Company’s certificate of incorporation to increase the number of authorized but
unissued shares of Common Stock to at least the Required Minimum at such time.

 

6.8                               Listing of Common Stock.  In the time and
manner required by the Principal Trading Market, the Company shall prepare and
file (or shall have prepared and filed) with such Trading Market an additional
shares listing application covering all of the Shares and shall use its
commercially reasonable efforts to take all steps necessary to maintain, so long
as any other shares of Common Stock shall be so listed, such listing or if no
longer listed on the Principal Trading Market, shall use its commercially
reasonable efforts to take all steps necessary to maintain a listing on another
Trading Market. The Company will then use its commercially reasonable efforts to
continue the listing or quotation and trading of its Common Stock on a Trading
Market and will comply in all material respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Trading Market. 
In addition, the Purchasers and the Company agree to cooperate in good faith, if
necessary, to restructure the transactions contemplated by the Transaction
Documents such that they do not contravene the rules and regulations of NASDAQ;
provided, however, that such restructuring does not impact the economic
interests of the Purchasers contemplated by the Transaction Documents.  Each
Purchaser agrees to provide information reasonably requested by the Company to
comply with this Section 6.8 and Section 3.21. The provisions of Sections 6.8
shall terminate and be of no further force and effect upon the expiration of the
Effectiveness Period.

 

6.9                               Equal Treatment of Purchasers.  No
consideration (including any modification of any Transaction Document) shall be
offered or paid to any Person to amend or consent to a waiver or modification of
any provision of this Agreement unless the same consideration is also offered to
all of the parties to this Agreement.  For clarification purposes, this
provision constitutes a separate right granted to each Purchaser by the Company
and negotiated separately by each Purchaser, and is intended for the Company to
treat the Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.

 

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6.10                        Form D; Blue Sky Filings.  The Company agrees to
timely file a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof, promptly upon request of any Purchaser.  The
Company shall take such action as the Company shall reasonably determine is
necessary in order to obtain an exemption for, or to qualify the Securities for,
sale to the Purchasers at the Closing under applicable securities or “Blue Sky”
laws of the states of the United States, and shall provide evidence of such
actions promptly upon request of any Purchaser.  Each Purchaser shall provide
any information reasonably requested by the Company to comply with Section 6.10.

 

6.11                        Acknowledgment of Dilution. The Company acknowledges
that the issuance of the Securities may result in dilution of the outstanding
shares of Common Stock, which dilution may be substantial under certain market
conditions.  The Company further acknowledges that its obligations under the
Transaction Documents, including, without limitation, its obligation to issue
the Unit Shares and Warrant Shares pursuant to the Transaction Documents, are
unconditional and absolute and not subject to any right of set off,
counterclaim, delay or reduction, regardless of the effect of any such dilution
or any claim the Company may have against any Purchaser and regardless of the
dilutive effect that such issuance may have on the ownership of the other
stockholders of the Company.

 

6.12                        Non-Public Information.  The Company covenants and
agrees that neither it, nor any other Person acting on its behalf will provide
any Purchaser or its agents or counsel with any information that constitutes, or
the Company reasonably believes constitutes, material non-public information
after the date hereof, unless prior thereto such Purchaser shall have consented
to the receipt of such information and agreed with the Company to keep such
information confidential. The Company understands and confirms that each
Purchaser shall be relying on the foregoing covenant in effecting transactions
in securities of the Company.  To the extent that the Company delivers any
material, non-public information to a Purchaser without such Purchaser’s
consent, the Company hereby covenants and agrees that such Purchaser shall not
have any duty of confidentiality to the Company or any of its officers,
directors, agents, employees or Affiliates, or a duty to the Company, or any of
its respective officers, directors, agents, employees or Affiliates not to trade
on the basis of, such material, non-public information, provided that the
Purchaser shall remain subject to applicable law. The Company understands and
confirms that each Purchaser shall be relying on the foregoing covenant in
effecting transactions in securities of the Company.

 

6.13                        Acknowledgment Regarding Purchaser’s Trading
Activity.  Anything in this Agreement or elsewhere herein to the contrary
notwithstanding (except for Section 4.3), it is understood and acknowledged by
the Company that: (i) none of the Purchasers has been asked by the Company to
agree, nor has any Purchaser agreed, to desist from purchasing or selling, long
and/or short, securities of the Company, or “derivative” securities based on
securities issued by the Company or to hold the Securities for any specified
term, (ii) past or future open market or other transactions by any Purchaser,
specifically including, without limitation, Short Sales or “derivative”
transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s
publicly-traded securities, (iii) any Purchaser, and counter-parties in
“derivative” transactions to which any such Purchaser is a party, directly or
indirectly, may presently have a “short” position in the Common Stock and
(iv) each Purchaser shall not be deemed to have any affiliation with or control
over any arm’s length counter-party in any “derivative” transaction.  The
Company further understands and acknowledges that (y) one or more Purchasers may
engage in hedging activities at various times during the period that the
Securities are outstanding, and (z) such hedging activities (if any) could
reduce the value of the existing stockholders’ equity interests in the Company
at and after the time that the hedging activities are being conducted.  Except
as contemplated by Section 4.3 hereof, Company acknowledges that such
aforementioned hedging activities do not constitute a breach of any of the
Transaction Documents.

 

6.14                        Other Actions.  Except as otherwise set forth in
this Agreement, from the date of this Agreement until the earlier to occur of
the Closing or the termination of this Agreement in accordance with the terms
hereof, the Company and the Purchasers shall not, and shall not permit any of
their respective Affiliates to, take, or agree or commit to take, any action
that would reasonably be expected to, individually or in the aggregate, prevent,
materially delay or materially impede the consummation of the transactions
contemplated by this Agreement.

 

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ARTICLE 7
TERMINATION

 

7.1                               Termination.  The obligations of the Company,
on the one hand, and the Purchasers, on the other hand, to effect the Closing
shall terminate as follows:

 

(a)                                 Upon the mutual written consent of the
Company and the Purchasers;

 

(b)                                 By the Company if any of the conditions set
forth in Section 2.5(a) shall have become incapable of fulfillment, and shall
not have been waived by the Company;

 

(c)                                  By a Purchaser (with respect to itself
only) if any of the conditions set forth in Section 2.5(b) shall have become
incapable of fulfillment, and shall not have been waived by such Purchaser; or

 

(d)                                 By either the Company or any Purchaser (with
respect to itself only) if the Closing has not occurred on or prior to
October 6, 2017;

 

provided, however, that, except in the case of clause (a) above, the party
seeking to terminate its obligation to effect the Closing shall not then be in
breach of any of its representations, warranties, covenants or agreements
contained in this Agreement or the other Transaction Documents if such breach
has resulted in the circumstances giving rise to such party’s seeking to
terminate its obligation to effect the Closing.

 

7.2                               Notice of Termination; Effect of Termination. 
In the event of termination by the Company or any Purchaser of its obligations
to effect the Closing pursuant to this ARTICLE 7, written notice thereof shall
forthwith be given to the other Purchasers by the Company and the other
Purchasers shall have the right to terminate their obligations to effect the
Closing upon written notice to the Company and the other Purchasers.  Nothing in
this ARTICLE 7 shall be deemed to release any party from any liability for any
breach by such party of the terms and provisions of this Agreement or the other
Transaction Documents or to impair the right of any party to compel specific
performance by any other party of its obligations under this Agreement or the
other Transaction Documents.

 

ARTICLE 8
MISCELLANEOUS

 

8.1                               Fees and Expenses.  The parties hereto shall
pay their own costs and expenses in connection herewith, including all
attorneys’ fees.  Notwithstanding the foregoing, the Company shall reimburse
each of Amzak Health Investors, LLC (“Amzak”) and Caxton Alternative Management,
LP (“CAM Capital”) for their reasonable and reasonably-documented consulting,
legal and other out-of-pocket expenses incurred in connection with the
transactions contemplated hereunder, provided that the Company shall not be
required to reimburse such expenses in excess of $50,000 in the aggregate for
each of Amzak and CAM Capital. The Company shall pay all Transfer Agent fees,
stamp taxes and other taxes and duties levied in connection with the sale and
issuance of their applicable Securities.

 

8.2                               Entire Agreement.  The Transaction Documents,
together with the exhibits and schedules thereto, contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged
into such documents, exhibits and schedules; provided, however, that any
Confidentiality Agreements previously entered into between the Company and any
Applicable Purchasers shall remain in full force and effect. At or after the
Closing, and without further consideration, the Company will execute and deliver
to the Purchasers, and the Purchasers will execute and deliver to the Company,
such further documents as may be reasonably requested in order to give practical
effect to the intention of the parties under the Transaction Documents.

 

8.3                               Notices.  Any and all notices or other
communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earliest of: 
(a) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number or by electronic

 

35

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mail at the email address set forth on the signature pages attached hereto at or
prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading
Day after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or by electronic mail at the email address
set forth on Exhibit A attached hereto on a day that is not a Trading Day or
later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second
(2nd) Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service or (d) upon actual receipt by the party to
whom such notice is required to be given.  The address for such notices and
communications shall be as follows:

 

(i)                                     if to the Company, to GTx, Inc., 175
Toyota Plaza, 7th Floor, Memphis, Tennessee 38103, Attention: Chief Legal
Officer and Secretary, (facsimile: 901-271-8670), with a copy to Cooley LLP, 101
California Street, 5th Floor, San Francisco, California 94111-5800 (facsimile:
415-693-2222), Attention: Chadwick L. Mills; and

 

(ii)                                  if to the Purchasers, to their respective
addresses as set forth on Exhibit A attached hereto.

 

8.4                               Amendments; Waivers. Subject to the provisions
of Section 5.7, no provision of this Agreement may be waived, modified,
supplemented or amended except in a written instrument signed, in the case of an
amendment, by the Company and the Principal Purchasers or, in the case of a
waiver, by the party against whom enforcement of any such waived provision is
sought, provided, however, that any proposed amendment or waiver that
disproportionately, materially and adversely affects the rights and obligations
of any Purchaser relative to the comparable rights and obligations of the other
Purchasers shall require the prior written consent of such adversely affected
Purchaser. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such
right.  Any amendment effected in accordance with accordance with this
Section 8.4 shall be binding upon each Purchaser and the Company.

 

8.5                               Headings.  The headings herein are for
convenience only, do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of the provisions hereof.

 

8.6                               Successors and Assigns.  This Agreement shall
be binding upon and inure to the benefit of the parties and their successors and
permitted assigns.  The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each Purchaser.  With
the consent of the Company which will not be unreasonably withheld, any
Purchaser may assign any or all of its rights under this Agreement to any Person
to whom such Purchaser assigns or transfers any Securities, provided, that a
Purchaser may assign any or all rights under this Agreement to an Affiliate of
such Purchaser without the consent of the Company, and provided, further:
(i) such transferor agrees in writing with the transferee or assignee to assign
such rights, and a copy of such agreement is furnished to the Company after such
assignment; (ii) the Company is furnished with written notice of (x) the name
and address of such transferee or assignee and (y) if the transferor is
assigning any registration rights under ARTICLE 5 hereof, the Registrable
Securities with respect to which such registration rights are being transferred
or assigned; (iii) following such transfer or assignment, the further
disposition of such securities by the transferee or assignee is restricted under
the Securities Act and applicable state securities laws, unless such disposition
was made pursuant to an effective registration statement or an exemption under
Rule 144 under the Securities Act; (iv) such transferee agrees in writing to be
bound, with respect to the transferred Securities, by the provisions of the
Transaction Documents that apply to the “Purchasers” including, without
limitation, all of representations, warranties and agreements set forth in
ARTICLE 4 hereof; and (v) such transfer shall have been made in accordance with
the applicable requirements of this Agreement and with all laws applicable
thereto.

 

8.7                               No Third-Party Beneficiaries.  This Agreement
is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, except as otherwise set forth
in Sections 5.4 and 6.6 and this Section 8.7.  In addition, each Placement Agent
shall be an intended third party beneficiary of (i) the Company’s
representations and warranties set forth in ARTICLE 3 hereof and (ii) each
Purchaser’s representations, warranties and agreements set forth in ARTICLE 4
hereof, including Section 4.8 hereof.

 

36

--------------------------------------------------------------------------------

 

8.8                               Governing Law; Jurisdiction.  This Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of Delaware without regard to the choice of law principles thereof.  Each
of the parties hereto irrevocably submits to the exclusive jurisdiction of the
state and federal courts located in the State of Delaware for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby.  Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement.  Each of the parties hereto irrevocably
consents to the jurisdiction of any such court in any such suit, action or
proceeding and to the laying of venue in such court.  Each party hereto
irrevocably waives any objection to the laying of venue of any such suit, action
or proceeding brought in such courts and irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. If any party hereto shall commence an Action or Proceeding
to enforce any provisions of the Transaction Documents, then, the prevailing
party in such Action or Proceeding shall be reimbursed by the non-prevailing
party for its reasonable attorneys’ fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such Action or
Proceeding.

 

8.9                               WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR
PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY
APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.

 

8.10                        Survival.  The representations and warranties
contained herein shall survive the Closing and the delivery of the Securities.

 

8.11                        Execution.  This Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to each other party, it being understood that the
parties need not sign the same counterpart.  In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

 

8.12                        Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction.  It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

 

8.13                        Rescission and Withdrawal Right.  Notwithstanding
anything to the contrary contained in (and without limiting any similar
provisions of) any of the other Transaction Documents, whenever any Purchaser
exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods
therein provided, then such Purchaser may rescind or withdraw, in its sole
discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future
actions and rights.

 

8.14                        Replacement of Securities.  If any certificate or
instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for
and upon cancellation thereof (in the case of mutilation), or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction.  The applicant for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs (including
customary indemnity) associated with the issuance of such replacement
Securities.

 

37

--------------------------------------------------------------------------------

 

8.15                        Remedies.  In addition to being entitled to exercise
all rights provided herein or granted by law, including recovery of damages,
each of the Purchasers and the Company will be entitled to specific performance
under the Transaction Documents.  The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agree to waive and
not to assert in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate.

 

8.16                        Independent Nature of Purchasers’ Obligations and
Rights.  The obligations of each Purchaser under any Transaction Document are
several and not joint with the obligations of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance or non-performance
of the obligations of any other Purchaser under any Transaction Document. 
Nothing contained herein or in any other Transaction Document, and no action
taken by any Purchaser pursuant hereof or thereto, shall be deemed to constitute
the Purchasers as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents.  Each Purchaser shall be
entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose.  Each
Purchaser has been represented by its own separate legal counsel in its review
and negotiation of the Transaction Documents.  The Company has elected to
provide all Purchasers with the same terms and Transaction Documents for the
convenience of the Company and not because it was required or requested to do so
by any of the Purchasers.

 

8.17                        Adjustments in Share Numbers and Prices. In the
event of any stock split, subdivision, dividend or distribution payable in
shares of Common Stock (or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly shares of Common
Stock), combination or other similar recapitalization or event occurring after
the date hereof, each reference in any Transaction Document to a number of
shares or a price per share shall be deemed to be amended to appropriately
account for such event.

 

8.18                        Liquidated Damages.  The Company’s obligations to
pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate
until all unpaid partial liquidated damages and other amounts have been paid
notwithstanding the fact that the instrument or security pursuant to which such
partial liquidated damages or other amounts are due and payable shall have been
canceled.

 

8.19                        Waiver of Conflicts. Each party to this Agreement
acknowledges that Cooley LLP (“Cooley”), outside general counsel to the Company,
has in the past performed and is or may now or in the future represent one or
more Purchasers or their affiliates in matters unrelated to the transactions
contemplated by this Agreement (the “Offering”), including representation of
such Purchasers or their affiliates in matters of a similar nature to the
Offering.  The applicable rules of professional conduct require that Cooley
inform the parties hereunder of this representation and obtain their consent. 
Cooley has served as outside general counsel to the Company and has negotiated
the terms of the Offering solely on behalf of the Company.  The Company and each
Purchaser hereby (a) acknowledge that they have had an opportunity to ask for
and have obtained information relevant to such representation, including
disclosure of the reasonably foreseeable adverse consequences of such
representation; (b) acknowledge that with respect to the Offering, Cooley has
represented solely the Company, and not any Purchaser or any stockholder,
director or employee of the Company or any Purchaser; and (c) gives its informed
consent to Cooley’s representation of the Company in the Offering.

 

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

38

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

 

GTx, INC.

 

 

 

 

 

 

By:

/s/ Marc S. Hanover

 

Name:

Marc S. Hanover

 

Title:

Chief Executive Officer

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

 

PURCHASER:

 

 

 

 

 

 

By:

/s/ J.R. Hyde, III

 

Name:

J. R. Hyde, III

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

 

 

PURCHASER:

 

 

 

 

 

Pyramid Peak Foundation

 

 

 

 

 

By:

/s/ Andrew R. McCarroll

 

Name:

Andrew R. McCarroll

 

Title:

Secretary

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

 

 

PURCHASER:

 

 

 

 

 

CDK Associates, L.L.C.

 

 

 

 

 

By:

/s/ Karen Cross

 

Name:

Karen Cross

 

Title:

Treasurer

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

 

 

PURCHASER:

 

 

 

 

 

Amzak Health Investors, LLC

 

 

 

 

 

By:

/s/ Anders Hove

 

Name:

Anders Hove

 

Title:

Manager

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

 

 

PURCHASER:

 

 

 

 

 

Aisling Capital IV LP

 

 

 

 

 

By:

/s/ Robert Wenzel

 

Name:

Robert Wenzel

 

Title:

CFO

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

 

 

PURCHASER:

 

 

 

 

 

Boxer Capital, LLC

 

 

 

 

 

By:

/s/ Aaron Davis

 

Name:

Aaron Davis

 

Title:

CEO

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

 

 

PURCHASER:

 

 

 

 

 

Abingworth BioEquities Master Fund Ltd

 

 

 

 

 

By:

/s/ James Abell

 

Name:

James Abell

 

Title:

Authorized Signatory

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

 

 

PURCHASER:

 

 

 

 

 

By:

/s/ Jack W. Schuler

 

Name:

Jack W. Schuler

 

--------------------------------------------------------------------------------

 

EXHIBIT A
SCHEDULE OF PURCHASERS

 

Name of Purchaser

and Address/Contact Information

 

Units

Purchased

 

Number of Unit

Shares Separable

from Units

Purchased

 

Number of Warrant

Shares Exercisable from

Warrants Separable from

Units Purchased

 

Aggregate Unit

Purchase Price

 

J.R. Hyde, III

17 West Pontotoc, Suite 100

Memphis, TN 38103

(901) 685-3404

 

1,130,582

 

1,130,582

 

678,349

 

$

9,999,997.79

 

Pyramid Peak Foundation

Crosstown Concourse

1350 Concourse Avenue, Suite 383

Memphis, TN 38104

(901) 818-5239

 

565,291

 

565,291

 

339,174

 

$

4,999,998.90

 

CDK Associates, L.L.C.

731 Alexander Road, Bldg. 2, Suite 500

Princeton, NJ 08540

(609) 524-8600

 

960,994

 

960,994

 

576,596

 

$

8,499,991.93

 

Amzak Health Investors, LLC

980 North Federal Highway, Suite 315

Boca Raton, FL 33432

(561) 953-4164

 

847,936

 

847,936

 

508,761

 

$

7,499,993.92

 

Aisling Capital IV LP

888 7th Avenue, 12th Floor

New York City, NY 10106

(212) 651-6380

 

847,936

 

847,936

 

508,761

 

$

7,499,993.92

 

Boxer Capital, LLC

11682 El Camino Real, Suite 320

San Diego, CA 92130

(858) 400-3111

 

565,291

 

565,291

 

339,174

 

$

4,999,998.90

 

Abingworth BioEquities Master Fund Ltd

38 Jermyn Street

London SW1Y 6DN, United Kingdom

(+44) 534-1500

 

339,174

 

339,174

 

203,504

 

$

2,999,994.03

 

 

--------------------------------------------------------------------------------

 

Name of Purchaser

and Address/Contact Information

 

Units

Purchased

 

Number of Unit

Shares Separable

from Units

Purchased

 

Number of Warrant

Shares Exercisable from

Warrants Separable from

Units Purchased

 

Aggregate Unit

Purchase Price

 

Jack W. Schuler

100 N. Field Drive, Suite 360

Lake Forest, IL 60045

(224) 880-1211

 

226,116

 

226,116

 

135,669

 

$

1,999,996.02

 

TOTAL:

 

5,483,320

 

5,483,320

 

3,289,988

 

$

48,499,965.41

 

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

FORM OF WARRANT

 

NEITHER THIS WARRANT, NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
(COLLECTIVELY, THE “SECURITIES”), HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES OR
BLUE SKY LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES OR BLUE SKY LAWS, PURSUANT TO REGISTRATION OR QUALIFICATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR
THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE
COMPANY MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY PROPOSED TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE
SKY LAWS. THIS WARRANT IS SUBJECT TO THE TRANSFER RESTRICTIONS SET FORTH HEREIN
AND IN A SECURITIES PURCHASE AGREEMENT, DATED AS OF SEPTEMBER 25, 2017, AND AS
AMENDED FROM TIME TO TIME, COPIES OF WHICH ARE AVAILABLE WITH THE SECRETARY OF
THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE
SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

GTX, INC.

 

COMMON STOCK WARRANT

 

Warrant
No. CSW2017-[·]                                                                                                                                                                              
Date of Original Issuance:  September 29, 2017

 

GTx, Inc., a Delaware corporation (the “Company”), hereby certifies that, for
value received, [·], or its registered assign (the “Holder”), is entitled to
purchase from the Company [·] shares (as adjusted from time to time as provided
in Section 11) of common stock, par value $0.001 per share, of the Company (the
“Common Stock”) (each such share, a “Warrant Share” and all such shares, the
“Warrant Shares”), at the Exercise Price determined pursuant to Section 3
hereof, at any time and from time to time on or after the Issuance Date and
through and including September 29, 2022 (the “Expiration Date”), and subject to
the following terms and conditions:

 

1.                                      Purchase Agreement.  This Common Stock
Warrant (this “Warrant”) is one of the Warrants issued by the Company in
connection with that certain Securities Purchase Agreement, entered into on
September 25, 2017 (as amended from time to time, the “Purchase Agreement”), by
and among the Company and Holder and certain other Purchasers, and is subject
to, and the Company and the Holder shall be bound by, all the applicable terms,
conditions and provisions of the Purchase Agreement.

 

2.                                      Definitions.  In addition to the terms
defined elsewhere in this Warrant, capitalized terms that are not otherwise
defined herein shall have the meanings assigned to such terms in the Purchase
Agreement.  As used herein, the following terms shall have the following
respective meanings:

 

(a)                                 “Eligible Market” means any of the NYSE
American, The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global
Select Market, or the New York Stock Exchange (or any successors to any of the
foregoing).

 

(b)                                 “Fair Market Value” of one share of Common
Stock as of the Date of Exercise means (i) the closing sales price of the Common
Stock, as reported by Bloomberg Financial Markets (or a comparable reporting
service of national reputation selected by the Company and reasonably acceptable
to the Holder if Bloomberg Financial Markets is not then reporting sales prices
of such security) (collectively, “Bloomberg”), on the

 

1

--------------------------------------------------------------------------------

 

Trading Day immediately prior to the Date of Exercise, or (ii) if an Eligible
Market is not then the Principal Trading Market, the average of the reported
sales prices reported by Bloomberg on the Trading Market for the Common Stock on
the Trading Day immediately prior to the Date of Exercise, or, if there is no
sales price on such Trading Day, the last bid price reported by Bloomberg for
such Trading Day, or (iii) if neither of the foregoing applies, the last sales
price of the Common Stock in the over-the-counter market as reported on the OTC
Pink marketplace maintained by OTC Markets Group Inc. (formerly Pink Sheets LLC)
(or any similar organization or agency succeeding to its functions of reporting
prices) for the Common Stock as reported by Bloomberg, or if no sales price is
so reported for the Common Stock, the last bid price of such Common Stock as
reported by Bloomberg or (iv) if fair market value cannot be calculated as of
such date on any of the foregoing bases, the fair market value shall be as
determined by the Board of Directors in the exercise of its good faith judgment.

 

(c)                                  “Issuance Date” means September 29, 2017,
the date this Warrant was originally issued.

 

(d)                                 “Principal Trading Market” means the Trading
Market on which the Common Stock is primarily listed on and quoted for trading.

 

(e)                                  “Shares” means the Company’s currently
authorized common stock, $0.001 par value, and stock of any other class or other
consideration into which such currently authorized capital stock may hereafter
have been changed.

 

(f)                                   “Trading Day” means (a) a day on which the
Common Stock is listed or quoted and traded on the Principal Trading Market
(other than the OTC Bulletin Board), or (b) if the Common Stock is not then
listed or quoted and traded on any Eligible Market, then a day on which the
Common Stock is traded in the over-the-counter market, as reported by the OTC
Bulletin Board, or (c) if the Common Stock is not quoted on any Trading Market,
a day on which the Common Stock is quoted in the over-the-counter market as
reported on the OTC Pink marketplace maintained by OTC Markets Group Inc.
(formerly Pink Sheets LLC) (or any similar organization or agency succeeding to
its functions of reporting prices); provided, that in the event that the Common
Stock is not listed or quoted as set forth in (a), (b) and (c) hereof, then
Trading Day shall mean a Business Day.

 

(g)                                  “Trading Market” means the OTC Bulletin
Board or any Eligible Market, or any national securities exchange, market or
trading or quotation facility on which the Common Stock is then listed or
quoted.

 

3.                                      Exercise Price. This Warrant may be
exercised for a price per Warrant Share equal to $9.02, subject to adjustment
from time to time pursuant to Section 11 (the “Exercise Price”).

 

4.                                      Registration of Warrant. The Company
shall register 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. The Company may deem and treat the 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.                                      Transfer of Warrant.

 

(a)                                 Subject to the Holder’s appropriate
compliance with the restrictive legend on this Warrant and the transfer
restrictions set forth herein and in the Purchase Agreement, this Warrant and
all rights hereunder are transferable, in whole or in part, upon surrender of
this Warrant at the principal office of the Company or its designated agent, and
the Company shall register the transfer of any portion of this Warrant in the
Warrant Register, upon (i) surrender of this Warrant, with the Form of
Assignment substantially in the form attached hereto as Attachment B duly
completed and signed, to the Company at its address specified herein and
(ii) delivery to the Company, at its address specified herein, an investment
letter and accredited investor and Securities Act Rule 506(d) “bad actor”
questionnaires, in form and substance reasonably satisfactory to the Company,
each signed by the transferee.  Upon any such registration or transfer, a new
Warrant to purchase Common Stock, in substantially the form of this Warrant (any
such new Warrant, a “New Warrant”), evidencing the portion of this Warrant so
transferred shall be issued to the transferee and a New Warrant evidencing the
remaining portion of this Warrant not so transferred, if any, shall be issued to
the transferring Holder. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant to the Company
unless the Holder has assigned this

 

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Warrant in full, in which case, the Holder shall surrender this Warrant to the
Company within three (3) Trading Days of the date the Holder delivers Form of
Assignment to the Company assigning this Warrant full.  The acceptance of the
New Warrant by the transferee thereof shall be deemed the acceptance by such
transferee of all of the rights and obligations of a holder of a Warrant;
provided, however, the failure of the Company to deliver a New Warrant shall not
preclude the transferee from exercising its rights for the purchase of Warrant
shares so transferred in accordance with this Section 5.

 

(b)                                 Notwithstanding the foregoing, the Holder
agrees not to sell, assign, transfer, pledge or otherwise transfer this Warrant,
or any beneficial interest therein, to any person (other than the Company)
unless and until the proposed transferee confirms to the reasonable satisfaction
of the Company that (i) the proposed transferee is an “accredited investor” as
defined in Rule 501(a) under the Securities Act and (ii) neither the proposed
transferee nor any of its directors, executive officers, other officers that may
serve as a director or officer of any company in which it invests, general
partners or managing members nor any person that would be deemed a beneficial
owner of those securities (in accordance with Rule 506(d) of the Securities Act)
is subject to any of the “bad actor” disqualifications described in
Rule 506(d)(1)(i) through (viii) under the Securities Act, except as set forth
in Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Securities Act and disclosed,
reasonably in advance of the transfer, in writing in reasonable detail to the
Company. The Holder will promptly notify the Company in writing if the Holder
or, to the Holder’s knowledge, any person specified in Rule 506(d)(1) under the
Securities Act becomes subject to any of the “bad actor” disqualifications
described in Rule 506(d)(1)(i) through (viii) under the Securities Act.

 

6.                                      Duration and Exercise of Warrant.  This
Warrant shall be exercisable by the registered Holder at any time and from time
to time on or after the Issuance Date and through and including the Expiration
Date. At 6:30 p.m., New York City time, on the Expiration Date, the portion of
this Warrant not exercised prior thereto shall be and become void and of no
value.

 

7.                                      Delivery of Warrant Shares; Net
Exercise.

 

(a)                                 To effect exercises hereunder, the Holder
shall not be required to physically surrender this Warrant, and unless this
Warrant is surrendered upon such exercise, the execution and delivery of the
Exercise Notice shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to purchase the
remaining number of Warrant Shares (if any). If this Warrant shall have been
exercised in part, the Company shall, at the request of a Holder and upon
surrender of this Warrant certificate, at the time of delivery of the 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  The Holder
and the Company shall maintain records showing the number of Warrant Shares
purchased and the date of such purchases. Upon delivery of an Exercise Notice
substantially in the form attached hereto as Attachment A (an “Exercise Notice”)
to the Company at its address for notice determined as set forth herein, and
upon payment of the Exercise Price for the number of Warrant Shares so indicated
by the Holder to be purchased (which may take the form a “net exercise” pursuant
to Section 7(c)), the Company shall, not later than two (2) Trading Days after
the Date of Exercise (the “Share Delivery Date”), issue and deliver, or cause
its transfer agent to issue and deliver, the Warrant Shares issuable upon such
exercise to the Holder (i) by crediting the account of the Holder’s or its
designee’s balance account with The Depository Trust Company through its Deposit
or Withdrawal at Custodian system (“DWAC”) if both (A) the Company is then a
participant in such system and (B) such Warrant Shares are required to be issued
free of all restrictive legends in accordance with the terms of the Purchase
Agreement, or otherwise (ii) by either (A) physical delivery of a certificate
for such Warrant Shares registered in the name of the Holder or its designee or
(B) electronically in the name of the Holder or its designee through the Direct
Registration System, which such instrument, to the extent provided for in the
Purchase Agreement, shall be free of restrictive legends and trading
restrictions. No ink-original Exercise Notice shall be required, nor shall any
medallion guarantee (or other type of guarantee or notarization) of any Exercise
Notice form be required.  A “Date of Exercise” means the date on which the
Holder shall have delivered to the Company: (1) an Exercise Notice,
appropriately completed and duly signed, and (2) unless the exercise of this
Warrant is being effected as a “net exercise” pursuant to Section 7(c), payment
of the Exercise Price (by certified or official bank check, intra-bank account
transfer or wire transfer) for the number of Warrant Shares so indicated by the
Holder to be purchased.  Upon delivery of the Exercise Notice, the Holder shall
be deemed for all corporate purposes to have

 

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become the holder of record of the Warrant Shares with respect to which this
Warrant has been exercised, irrespective of the date of delivery of the Warrant
Shares.

 

(b)                                 In connection with any exercise of this
Warrant (other than an Expiring Exercise (as defined below)), if the Company
shall fail for any reason to deliver the Warrant Shares by the Share Delivery
Date, and if on or after the Share Delivery Date the Holder purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of any portion of such Warrant Shares that
the Holder anticipated receiving by the Share Delivery Date (a “Buy-In”), then
the Company shall, within two (2) Trading Days after the Holder’s request and in
the Holder’s discretion, either: (i) pay cash to the Holder in an amount equal
to the Holder’s total purchase price (including brokerage commissions, if any)
for the shares of Common Stock so purchased by the Holder (the “Buy-In Price”),
at which point the Company’s obligation to deliver such Warrant Shares shall
terminate, or (ii) promptly honor its obligation to deliver to the Holder such
Warrant Shares as provided above and pay cash to the Holder in an amount equal
to the excess (if any) of the Buy-In Price over the product of (A) such number
of Warrant Shares, times (B) the Fair Market Value of one share of Common Stock
as of the Date of Exercise. Alternatively, if the Company fails to cause the
transfer agent to transmit to the Holder the Warrant Shares pursuant to
Section 7(a) by the Share Delivery Date, then the Holder may, within (2) Trading
Days following the Share Delivery Date, rescind such exercise, in which case, if
so rescinded, the Company shall be under no obligation to make any cash payments
to the Holder pursuant to this Section 7(b) relating to or arising from such
rescinded exercise.  In connection with the foregoing, the Holder agrees to use
its reasonable efforts to notify the Company in advance of any pending exercise
of this Warrant in order to enable to the Company to deliver the Warrant Shares
by the Share Delivery Date.

 

(c)                                  In lieu of exercising this Warrant by
payment of cash, the Holder may, at its election, at any time on or prior to the
Expiration Date, effect a “net exercise” of this Warrant as indicated in the
Holder’s Exercise Notice, in which event, if so effected, the Holder shall be
entitled to receive Warrant Shares equal to the value (as determined below) of
this Warrant (or the portion thereof being exercised) by surrender of this
Warrant at the principal office of the Company, if applicable, together with the
appropriately completed and duly signed Exercise Notice, in which event the
Company shall issue to the Holder a number of Warrant Shares computed using the
following formula:

 

[g226391ks13i001.jpg]

Where:

 

X =                             the number of Warrant Shares to be issued to the
Holder

 

Y =                             the number of Warrant Shares with respect to
which this Warrant is being exercised

 

A =                             the Fair Market Value of one share of Common
Stock (as of the Date of Exercise)

 

B =                             Exercise Price (as of the Date of Exercise)

 

For the avoidance of doubt, if the foregoing calculation results in zero or a
negative number, then no Warrant Shares shall be issued upon exercise pursuant
to this Section 7(c).

 

Notwithstanding anything contained herein to the contrary, if an exemption from
registration under the Securities Act is not available to the Company for an
exercise of this Warrant for cash at the time the Holder elects to exercise this
Warrant, then the exercise of this Warrant may only be effected as a “net
exercise” pursuant to this Section 7(c).

 

In addition, notwithstanding anything herein to the contrary, on the Expiration
Date, any unexercised portion of this this Warrant shall be automatically
exercised via “net exercise” pursuant to this Section 

 

4

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7(c) (an “Expiring Exercise”), and any Warrant Shares issued upon such exercise
shall be delivered in certificated form to the Holder at its address then
appearing on the Warrant Register.

 

(d)                                 The Company’s obligations to issue and
deliver Warrant Shares in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to enforce the same,
or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to
the Company or any violation or alleged violation of law by the Holder or any
other Person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the Holder in connection with the
issuance of Warrant Shares. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in equity,
including a decree of specific performance and/or injunctive relief with respect
to the Company’s failure to timely deliver the certificates representing shares
of Common Stock upon exercise of the Warrant as required pursuant to the terms
hereof; provided, however, that under no circumstances shall the Company be
required to settle any exercises of this Warrant by cash payment or to otherwise
“net cash settle” this Warrant.

 

8.                                      Charges, Taxes and Expenses. Issuance
and delivery of certificated or uncertificated shares of Common Stock upon
exercise of this Warrant shall be made without charge to the Holder for any
issue or transfer tax, withholding tax, transfer agent fee, or other incidental
tax or expense in respect of the issuance of such shares, all of which taxes and
expenses shall be paid by the Company; provided, however, that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the registration of any certificates for Warrant Shares or Warrants
in a name other than that of the Holder. The Holder shall be responsible for all
other tax liability that may arise as a result of holding or transferring this
Warrant or receiving Warrant Shares upon exercise hereof.

 

9.                                      Replacement of Warrant. If this Warrant
is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon cancellation hereof, or in lieu
of and substitution for this Warrant, a new Warrant, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity (which shall not include a
surety bond), if requested. Applicants for a new warrant under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable third-party costs as the Company may
prescribe. If a new warrant is requested as a result of a mutilation of this
Warrant, then the Holder shall deliver this mutilated Warrant to the Company as
a condition precedent to the Company’s obligation to issue the new warrant.

 

10.                               Reservation of Warrant Shares. The Company
covenants that it will at all times reserve and keep available out of the
aggregate of its authorized but unissued and otherwise unreserved Common Stock,
solely for the purpose of enabling it to issue Warrant Shares upon exercise of
this Warrant as herein provided, the number of Warrant Shares which are then
issuable and deliverable upon the exercise of this entire Warrant, free from
liens, encumbrances or any other contingent purchase rights of persons other
than the Holder (taking into account the adjustments and restrictions of
Section 11). The Company covenants and warrants that all Warrant Shares so
issuable and deliverable shall, upon issuance and the payment of the applicable
Exercise Price in accordance with the terms hereof, be duly and validly
authorized, issued and fully paid and non-assessable.

 

11.                               Certain Adjustments. The Exercise Price and
the number of Warrant Shares issuable upon exercise of this Warrant is subject
to adjustment from time to time as set forth in this Section 11.

 

(a)                                 Stock Dividends and Splits. If the Company,
at any time while this Warrant is outstanding: (i) pays a stock dividend on its
Common Stock or otherwise makes a distribution on any class of capital stock
that is payable in shares of Common 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 Common Stock any shares
of capital stock of the Company; then in each such case (A) the Exercise Price
will be adjusted by multiplying the Exercise Price then in effect by a fraction,
the numerator of which equals the number of shares of Common Stock outstanding
immediately prior to such event (excluding treasury shares, if any), and the
denominator of which equals the number of shares of Common Stock outstanding
immediately after such event (excluding treasury shares, if any), and (B) the
number of Warrant Shares issuable hereunder shall be concurrently adjusted by
multiplying such number by the

 

5

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reciprocal of such fraction. Such adjustments will take effect (i) if a record
date shall have been fixed for determining the stockholders or security holders,
as applicable, of the Company entitled to receive such dividend, distribution or
issuance by reclassification, as the case may be, immediately after such record
date, (ii) otherwise, immediately after the effective date of such dividend,
distribution, subdivision, combination, or issuance by reclassification, as the
case may be.

 

(b)                                 Fundamental Transaction. If, at any time
while this Warrant is outstanding, (i) the Company, directly or indirectly, in
one or a series of related transactions, (A) effects any merger, consolidation
or reorganization or other similar transaction or a series of related
transactions which results in the voting securities of the Company outstanding
immediately prior thereto representing immediately thereafter (either by
remaining outstanding or by being converted into voting securities of the
surviving or acquiring entity) less than 50% of the combined voting power of the
voting securities of or economic interests in the Company or such surviving or
acquiring entity outstanding immediately after such merger, consolidation or
reorganization, (B) effects any sale, lease, license, assignment, transfer,
conveyance, distribution or other disposition of all or substantially all of its
assets, (C) effects any reclassification, reorganization or recapitalization of
the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or
property (except for the events contemplated by Section 11(a)), or
(D) consummates a stock or share purchase agreement or other business
combination (including a reorganization, recapitalization, spin-off or scheme of
arrangement) with another Person or “group” (within the meaning of
Section 13(d) or 14(d) of the Exchange Act) whereby such other Person or “group”
acquires more than 50% of the voting power of or economic interests in the then
outstanding shares of capital stock of the Company (after giving effect to such
transaction); or (ii) any, direct or indirect, purchase offer, tender offer or
exchange offer (whether by the Company or another Person or group of Persons) is
completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property (each
transaction or series of transactions referred to in clause (i) or (ii) above, a
“Fundamental Transaction”); then, upon any subsequent exercise of this Warrant,
the Holder shall have the right to receive, for each Warrant Share that would
have been issuable upon such exercise immediately prior to the occurrence of
such Fundamental Transaction (without regard to any limitation in Section 12 on
the exercise of this Warrant), the number of shares of Common Stock of the
successor or acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number
of shares of Common Stock for which this Warrant is exercisable immediately
prior to such Fundamental Transaction (without regard to any limitation in
Section 12 on the exercise of this Warrant).  For purposes of any such exercise,
the determination of the Exercise Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration.  If holders of Common
Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as
to the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction.  The Company shall cause any successor
entity in a Fundamental Transaction in which the Company is not the survivor
(the “Successor Entity”) to assume in writing all of the obligations of the
Company under this Warrant in accordance with the provisions of this
Section 11(b) prior to such Fundamental Transaction and shall, at the option of
the Holder and to the extent applicable in light of the structure of the
Fundamental Transaction, deliver to the Holder in exchange for this Warrant a
security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant which is exercisable for a
corresponding number of shares of capital stock of such Successor Entity (or its
parent entity) (only the extent such capital stock is the form of consideration
paid in the Fundamental Transaction) equivalent to the shares of Common Stock
acquirable and receivable upon exercise of this Warrant (without regard to any
limitations in Section 12 on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies the Exercise
Price hereunder to such shares of capital stock (but taking into account the
relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such number of shares
of capital stock and such exercise price). Upon the occurrence of any such
Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant and the other Transaction Documents
referring to the “Company” shall refer instead to the Successor Entity), and may
exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant and the other Transaction

 

6

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Documents with the same effect as if such Successor Entity had been named as the
Company herein. The provisions of this Section 11(b) shall similarly apply to
successive Fundamental Transactions.

 

(c)                                  Adjustment Rules.

 

(i)                                     Any adjustments pursuant to this
Section 11 shall be made successively whenever any event referred to herein
shall occur, except that, notwithstanding any other provision of this
Section 11, no adjustment shall be made to the number of Warrant Shares to be
delivered to the Holder (or to the Exercise Price) if such adjustment represents
less than 1% of the number of Warrant Shares previously required to be so
delivered, but any lesser adjustment shall be carried forward and shall be made
at the time and together with the next subsequent adjustment which together with
any adjustments so carried forward shall amount to 1% or more of the number of
Warrant Shares to be so delivered.

 

(ii)                                  No adjustments shall be made pursuant to
this Section 11 in respect of the issuance of Warrant Shares upon exercise of
the Warrant.

 

(iii)                               If the Company shall take a record of the
holders of its shares for any purpose referred to in this Section 11, then
(x) such record date shall be deemed to be the date of the issuance, sale,
distribution or grant in question and (y) if the Company shall legally abandon
such action prior to effecting such action, no adjustment shall be made pursuant
to this Section 11 in respect of such action.

 

(iv)                              In computing adjustments under this
Section 11, (A) fractional interests in Warrant Shares shall be taken into
account to the nearest one-thousandth of a Warrant Share, and (B) calculations
of the Exercise Price shall be carried to the nearest one-thousandth of one
cent.

 

(d)                                 Proceedings Prior to Any Action Requiring
Adjustment.  Subject to the below proviso, as a condition precedent to the
taking of any action which would require an adjustment pursuant to this
Section 11, the Company shall take any action which may be necessary, including
obtaining regulatory approvals or exemptions, in order that the Company may
thereafter validly and legally issue as fully paid and non-assessable all
Warrant Shares which the Holder is entitled to receive upon exercise of the
Warrant.

 

(e)                                  Notice of Adjustment. Not less than 20 days
prior to the record date or effective date, as the case may be, of any action
which requires or might require an adjustment or readjustment pursuant to this
Section 11, the Company shall give notice to the Holder of such event,
describing such event in reasonable detail and specifying the record date or
effective date, as the case may be, and, if determinable, the required
adjustment and computation thereof; provided, however, that such notice will not
include (nor be required to include) any information that constitutes, or that
the Company reasonably believes constitutes, material non-public information,
unless prior thereto the Holder shall have consented to the receipt of such
material non-public information and agreed with the Company to keep such
material non-public information confidential. If the required adjustment is not
determinable as the time of such notice, the Company shall give notice to the
Holder of such adjustment and computation as soon as reasonably practicable
after such adjustment becomes determinable. In connection with any such
adjustment or readjustment, the Company shall prepare a report setting forth
such adjustment or readjustment and showing in reasonable detail the method of
calculation thereof and the facts upon which such adjustment or readjustment is
based, including a statement of (i) the number of Shares outstanding or deemed
to be outstanding, and (ii) the Exercise Price in effect immediately prior to
such issue or sale and as adjusted and readjusted (if required by this
Section 11) on account thereof. The Company will forthwith mail a copy of each
such report to the Holder and will, upon the written request at any time of the
Holder, furnish to such holder a like report setting forth the Exercise Price at
the time in effect and showing in reasonable detail how it was calculated. The
Company will also keep copies of all such reports at its office and will cause
the same to be available for inspection at such office during normal business
hours by the Holder.  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.

 

7

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(f)                                   Disputes. Any dispute which arises between
the Holder and the Company with respect to the calculation of the adjusted
Exercise Price or Warrant Shares issuable upon exercise shall be determined by
the independent auditors of the Company in accordance with the terms of this
Warrant, and such determination shall be binding upon the Company and the
holders of the Warrants and the Warrant Shares if made in good faith and without
manifest error.

 

12.                               [Intentionally Omitted][Limitation on
Exercise]. Notwithstanding anything to the contrary contained herein, the number
of Warrant Shares that may be acquired by the Holder upon any exercise of this
Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to ensure that, following such exercise (or other issuance), the total
number of shares of Common Stock then beneficially owned by the Holder and any
other Persons whose beneficial ownership of shares of Common Stock would be
aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act,
does not exceed [·] of the total number of then issued and outstanding shares of
Common Stock (including for such purpose the Warrant Shares issuable upon such
exercise). For such purposes, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder, it being acknowledged by the Holder that the Company is
not representing to such Holder that such calculation is in compliance with
Section 13(d) of the Exchange Act and such Holder is solely responsible for any
schedules required to be filed in accordance therewith. To the extent that the
limitation contained in this Section 12 applies, the determination of whether
this Warrant is exercisable (in relation to other securities owned by such
Holder) and of which portion of this Warrant is exercisable shall be in the sole
discretion of the Holder, and the submission of a Notice of Exercise shall be
deemed to be the Holder’s determination of whether this Warrant is exercisable
(in relation to other securities owned by such Holder) and of which portion of
this Warrant is exercisable, in each case subject to such aggregate percentage
limitation, and the Company shall have no obligation to verify or confirm the
accuracy of such determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 12, in determining the number of
outstanding shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as reflected in (x) the Company’s most recent
Form 10-Q or Form 10-K, as the case may be, (y) a more recent public
announcement by the Company or (z) any other notice by the Company or the
Company’s transfer agent setting forth the number of shares of Common Stock
outstanding. Upon the written request of the Holder, the Company shall within
three Business Days confirm orally and in writing to such Holder the number of
outstanding shares of Common Stock. This provision shall not restrict the number
of shares of Common Stock which a Holder may receive or beneficially own in
order to determine the amount of securities or other consideration that such
Holder may receive in the event of a transaction contemplated in Section 11 of
this Warrant. By written notice to the Company, which will not be effective
until the 61st day after such notice is delivered to the Company, the Holder may
waive or amend the provisions of this Section 12 to change the beneficial
ownership limitation to any other number[, provided such number does not exceed
[·] of the number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon exercise of this
Warrant], and the provisions of this Section 12 and Section 13 shall continue to
apply.]

 

13.                               Beneficial Ownership Limitation.
Notwithstanding anything to the contrary contained herein, the Company shall not
effect any exercise of this Warrant, and the Holder shall not have the right to
exercise this Warrant, for a number of Warrant Shares in excess of that number
of Warrant Shares that, upon giving effect to such exercise, would cause (a) the
aggregate number of shares of Common Stock beneficially owned by such Holder and
its Affiliates and any other Persons whose beneficial ownership of Common Stock
would be aggregated with the Holder’s for purposes of Section 13(d) of the
Exchange Act to exceed [·] of the total number of shares of the Common Stock
outstanding following such exercise, or (b) the combined voting power of the
securities of the Company beneficially owned by such Holder and its Affiliates
and any other Persons whose beneficial ownership of Common Stock would be
aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act
to exceed [·] of the combined voting power of all of the securities of the
Company outstanding following such exercise. For purposes of the foregoing
sentence, the number of shares of Common Stock or voting securities beneficially
owned by the Holder and its Affiliates and any other Persons whose beneficial
ownership of Common Stock would be aggregated with the Holder’s for purposes of
Section 13(d) of the Exchange Act shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which such
determination is being made, but shall exclude shares of Common Stock or other
voting securities which would be issuable upon (i) exercise of the remaining,
unexercised portion of this Warrant and (ii) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company
beneficially owned by the Holder or any of its Affiliates and other

 

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Persons whose beneficial ownership of Common Stock would be aggregated with the
Holder’s for purposes of Section 13(d) of the Exchange Act (including, without
limitation, any convertible notes or convertible preferred stock or warrants)
subject to a limitation on conversion or exercise analogous to the limitation
contained in this Section 13. Except as set forth in the preceding sentence, for
purposes of this Section 13, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. The provisions of this Section 13 shall be construed,
corrected and implemented in a manner so as to effectuate the intended
beneficial ownership limitation herein contained.

 

14.                               No Fractional Shares. No fractional shares of
Common Stock will be issued in connection with any exercise of this Warrant. In
lieu of any fractional shares which would otherwise be issuable, the Company
shall pay the Holder an amount of cash equal to the product of such fraction
multiplied by the Fair Market Value of one share of Common Stock as of the Date
of Exercise.

 

15.                               No Impairment. The Company shall not by any
action including, without limitation, amending its Certificate of Incorporation,
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
shall at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action, as may be necessary or appropriate to
protect the rights of the Holder against impairment. Without limiting the
generality of the foregoing, the Company shall take all such action as may be
necessary or appropriate in order that the Company may validly issue fully paid
and nonassessable shares of Common Stock upon the exercise of this Warrant at
the then Exercise Price therefor.

 

16.                               No Rights as a Stockholder; Notice to Holder.
Nothing contained in this Warrant shall be construed as conferring upon the
Holder the right to vote or to consent or to receive notice as a stockholder in
respect of any meeting of stockholders for the election of directors of the
Company or any other matter, or any rights whatsoever as a stockholder of the
Company.

 

17.                               Warrant Agent. The Company shall serve as
warrant agent under this Warrant. Upon thirty (30) days’ notice to the Holder,
the Company may appoint a new warrant agent. Any corporation into which the
Company or any new warrant agent may be merged or any corporation resulting from
any consolidation to which the Company or any new warrant agent shall be a party
or any corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or stockholders services business shall
be a successor warrant agent under this Warrant without any further act. Any
such successor warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed (by first class mail, postage prepaid) to the Holder
at the Holder’s last address as shown on the Warrant Register.

 

18.                               Miscellaneous.

 

(a)                                 Notices. Any and all notices or other
communications or deliveries hereunder (including any Exercise Notice) shall be
in writing and shall be deemed given and effective on the earliest of (i) the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number pursuant to this Section 18(a) prior to 5:30 p.m. (New
York City time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified pursuant to this Section 18(a) on a day that is not a
Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day,
(iii) the second Trading Day following the date of mailing, if sent by
nationally recognized overnight courier service to the street address specified
pursuant to this Section 18(a), or (iv) upon actual receipt by the party to whom
such notice is required to be given. The addresses for such communications shall
be as follows:

 

(i) if to the Company, to:

 

GTx, Inc.

175 Toyota Plaza

7th Floor

Memphis, Tennessee 38103

Attn: Principal Financial Officer or Chief Legal Officer

 

9

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Facsimile: (901) 844-8075

 

with a copy to (which shall not constitute notice to the Company):

 

Cooley LLP

101 California Street, 5th Floor

San Francisco, California  94111-5800

Attn: Chadwick L. Mills

Facsimile: (415) 693-2222

 

(ii) if to the Holder, to the address, facsimile number or street address
appearing on the Warrant Register (which shall initially be the facsimile number
and street address set forth for the initial Holder in the Purchase Agreement);

 

or to such other address, facsimile number or email address as the Company or
the Holder may provide to the other in accordance with this Section 18(a).

 

(b)                                 Assignment. Subject to the restrictions on
transfer described herein and in the Purchase Agreement, the rights and
obligations of the Company and the Holder shall be binding upon, and inure to
the benefit of, the successors, assigns, heirs, administrators and transferees
of the parties. Without the prior written consent of the Holder, which may be
withheld in the Holder’s sole discretion, this Warrant may not be assigned by
the Company except to a successor in the event of a Fundamental Transaction.

 

(c)                                  No Third Party Beneficiaries. Nothing in
this Warrant shall be construed to give to any Person other than the Company and
the Holder any legal or equitable right, remedy or cause of action under this
Warrant.

 

(d)                                 Amendments; Waiver.  Any term of this
Warrant may be amended or waived (either generally or in a particular instance
and either retroactively or prospectively) with the written consent of the
Company and the Holder.  No waiver of any default with respect to any provision,
condition or requirement of this Warrant shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right.

 

(e)                                  Governing Law. This Warrant shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to principles of conflict of laws.

 

(f)                                   Severability. If one or more provisions of
this Warrant are held to be unenforceable under applicable law in any respect,
such provision shall be excluded from this Warrant and the balance of this
Warrant shall be construed and interpreted as if such provision were so excluded
and shall be enforceable in accordance with its remaining terms.

 

(g)                                  Nonwaiver and Expenses.  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.  Without limiting any other provision of
this Warrant or the Purchase Agreement, if the Company willfully and knowingly
fails to comply with any provision of this Warrant, which results in any
material damages to the Holder, the Company shall pay to the Holder such amounts
as shall be sufficient to cover any costs and expenses including, but not
limited to, reasonable attorneys’ fees, including those of appellate
proceedings, incurred by the Holder in collecting any amounts due pursuant
hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

 

(h)                                 Limitation of Liability.  No provision
hereof, in the absence of any affirmative action by the Holder to exercise this
Warrant to purchase Warrant Shares, and no enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the Holder for the
purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.

 

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 

10

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
its authorized officer as of the date first indicated above.

 

 

GTx, INC.

 

 

 

By:

 

 

Name:

Marc S. Hanover

 

Title:

Chief Executive Officer

 

[Signature Page — Warrant]

 

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ATTACHMENT A

 

EXERCISE NOTICE

 

To GTx, Inc.:

 

The undersigned hereby irrevocably elects to purchase shares (the “Shares”) of
common stock, par value $0.001 per share (“Common Stock”), of GTx, Inc., a
Delaware corporation, pursuant to Warrant No. CSW2017-[·], originally issued on
September 29, 2017 (the “Warrant”). The undersigned elects to utilize the
following manner of exercise:

 

Shares:

 

o Full Exercise of Warrant

o Partial Exercise of Warrant (in the amount of             Shares)

 

Exercise Price: $          

 

The Holder intends that payment of the Exercise Price shall be made as (check
one):

 

o “Net Exercise” under Section 7(c) of the Warrant

o Certified or Official Bank Check

o Intra-Bank Account Transfer

o Wire Transfer

[Please issue a new Warrant for the unexercised portion of the attached Warrant
in the name of the [undersigned]/[the undersigned’s nominee as is specified
below].]

 

Date:

 

 

Full Name of Holder†:

 

 

Signature of Holder or Authorized Representative:

 

 

Name and Title of Authorized Representative††:

 

 

Additional Signature of Holder (if jointly held):

 

 

Social Security or Tax Identification Number:

 

 

Address of Holder:

 

 

 

 

 

 

 

 

Full Name of Nominee of Holder††:

 

 

Address of Nominee of Holder††:

 

 

 

 

 

 

 

 

 

If the shares are to be delivered via DTC DWAC as permitted by the Warrant,
please complete the DTC DWAC information below:

 

 

 

 

Name of DTC Participant (broker-dealer at which the account to be credited with
the Warrant Shares is maintained):

 

 

DTC Participant Number:

 

 

Name of Account at DTC Participant being credited with the Warrant Shares:

 

 

 

--------------------------------------------------------------------------------

 

Account Number at DTC Participant being credited with the Warrant Shares:

 

 

Person to contact to initiate DWAC:

 

Name:

 

 

 

Tel:

 

 

 

Email:

 

 

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†   Must conform in all respects to name of holder as specified on the face of
the Warrant.

†† If applicable.

 

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ATTACHMENT B

 

FORM OF ASSIGNMENT

 

[To be completed and signed only upon transfer of Warrant]

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
                the right represented by the attached Common Stock Warrant to
purchase                       shares of Common Stock of GTx, Inc., a Delaware
corporation (the “Company”), to which the Warrant relates and
appoints                     as attorney to transfer said right on the books of
the Company with full power of substitution in the premises.

 

Date:

 

 

Full Name of Holder*:

 

 

Signature of Holder or Authorized Representative:

 

 

Name and Title of Authorized Representative†:

 

 

Additional Signature of Holder (if jointly held):

 

 

Address of Holder:

 

 

 

 

 

 

 

 

Full Name of Transferee:

 

 

Address of Transferee:

 

 

 

 

 

 

 

 

 

 

 

In the presence of:

 

 

 

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*  Must conform in all respects to name of holder as specified on the face of
the Warrant.

†  If applicable.

 

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EXHIBIT C

 

STOCK REGISTRATION QUESTIONNAIRE

 

Pursuant to Section 2.4 of the Agreement, please provide us with the following
information:

 

 

The exact name that the Securities are to be registered in (this is the name
that will appear on the warrant(s) and common stock certificate(s) or Direct
Registration System advice(s)):

 

 

 

 

 

The relationship between the Purchaser of the Securities and the Registered
Purchaser listed in response to Item 1 above:

 

 

 

 

 

The mailing address, telephone and telecopy number of the Registered Purchaser
listed in response to Item 1 above:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Tax Identification Number (or, if an individual, the Social Security Number)
of the Registered Purchaser listed in response to Item 1 above:

 

 

 

 

 

Computershare Account Number of the Registered Purchaser listed in response to
Item 1 above (indicate none if such Registered Purchaser does not yet have one):

 

 

Form of delivery of Unit Shares:

Stock certificate(s): o

 

Electronic book-entry in the Direct Registration System: o

 

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EXHIBIT D

 

FORM OF LEGAL OPINION

 

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EXHIBIT E

 

ACCREDITED INVESTOR QUALIFICATION QUESTIONNAIRE

 

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EXHIBIT F

 

BAD ACTOR QUESTIONNAIRE

 

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EXHIBIT G

 

REQUIRED WAIVER DISCLOSURE

 

On December 6, 2016, a final judgment (the “Judgment”) was entered against
Stifel, Nicolaus & Company, Incorporated (“Stifel”) by the United States
District Court for the Eastern District of Wisconsin (Civil Action
No. 2:11-cv-00755) resolving a civil lawsuit filed by the U.S. Securities &
Exchange Commission (the “SEC”) in 2011 involving violations of several
antifraud provisions of the federal securities laws in connection with the sale
of synthetic collateralized debt obligations to five Wisconsin school districts
in 2006.  As a result of the Judgment: (i) Stifel is required to cease and
desist from committing or causing any violations and any future violations of
Section 17(a)(2) and 17(a)(3) of the Securities Act; and (ii) Stifel and a
former employee were jointly liable to pay disgorgement and prejudgment interest
of $2.44 million. Stifel was also required to pay a civil penalty of $22.5
million, of which disgorgement and civil penalty Stifel was required to pay
$12.5 million to the school districts involved in this matter.

 

Simultaneously with the entry of the Judgment, the SEC issued an Order granting
Stifel a waiver from, among other things, the application of the
disqualification provisions of Rule 506(d)(1)(iv) of Regulation D under the
Securities Act.

 

A copy of the Judgment is available on the SEC’s website at:

https://www.sec.gov/litigation/litreleases/2016/lr23700-final-judgment.pdf.

 

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EXHIBIT H

 

PLAN OF DISTRIBUTION

 

We are registering the shares of common stock issued to the selling stockholders
and issuable upon exercise of the warrants issued to the selling stockholders to
permit the resale of these shares of common stock by the selling stockholders
from time to time from after the date of this prospectus. We will not receive
any of the proceeds from the sale by the selling stockholders of the shares of
common stock. We will bear all fees and expenses incident to our obligation to
register the shares of common stock.

 

Each selling stockholder may, from time to time, sell any or all of their shares
of common stock covered hereby on The NASDAQ Global Market or any other stock
exchange, market or trading facility on which the shares are traded or in
private transactions. These sales may be at fixed prices, at prevailing market
prices at the time of the sale, at varying prices determined at the time of
sale, or privately negotiated prices. A selling stockholder may use any one or
more of the following methods when selling shares:

 

·                  ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

 

·                  block trades in which the broker-dealer will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;

 

·                  purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;

 

·                  an exchange distribution in accordance with the rules of the
applicable exchange;

 

·                  privately negotiated transactions;

 

·                  settlement of short sales, to the extent permitted by law;

 

·                  in transactions through broker-dealers that agree with the
selling stockholders to sell a specified number of such shares at a stipulated
price per share;

 

·                  through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;

 

·                  a combination of any such methods of sale; or

 

·                  any other method permitted pursuant to applicable law.

 

The selling stockholders may also sell the shares of common stock under Rule 144
under the Securities Act, if available, rather than under this prospectus.

 

Broker-dealers engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated, but, except as set forth in a supplement to this prospectus, in the
case of an agency transaction not in excess of a customary brokerage commission
in compliance with FINRA Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with FINRA IM-2440-1.

 

In connection with the sale of the shares of common stock or interests therein,
the selling stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the
shares of common stock in the course of hedging the positions they assume. The
selling stockholders may also sell the shares of common stock short and deliver
these securities to close out their short positions or to return borrowed shares
in connection with such short sales, or loan or pledge the shares of common
stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or create one or more derivative
securities which require the delivery to such broker-dealer or other financial
institution of shares of common stock offered by this

 

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prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction).

 

The selling stockholders and any broker-dealers or agents that are involved in
selling the shares of common stock may be deemed to be “underwriters” within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such selling stockholders, broker-dealers or agents and
any profit on the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. Selling
stockholders who are “underwriters” within the meaning of Section 2(11) of the
Securities Act will be subject to the prospectus delivery requirements of the
Securities Act and may be subject to certain statutory liabilities of, including
but not limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5
under the Exchange Act. Each selling stockholder has informed us that it is not
a registered broker-dealer or an affiliate of a registered broker-dealer. In no
event shall any broker-dealer receive fees, commissions and markups which, in
the aggregate, would exceed eight percent (8%).

 

We are required to pay certain fees and expenses incurred by us incident to the
registration of the shares. We have agreed to indemnify the selling stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act, and the selling stockholders may be entitled to
contribution. We may be indemnified by the selling stockholders against certain
losses, claims, damages and liabilities, including liabilities under the
Securities Act that may arise from any written information furnished to us by
the selling stockholders specifically for use in this prospectus, or we may be
entitled to contribution.

 

The selling stockholders will be subject to the prospectus delivery requirements
of the Securities Act including Rule 172 thereunder unless an exemption
therefrom is available.

 

We agreed to cause the registration statement of which this prospectus is a part
to remain effective until the earlier to occur of [•] or the date on which all
of the shares registered hereby are either sold pursuant to the registration
statement or sold or available for resale without restriction under Rule 144
under the Securities Act. The shares of common stock will be sold only through
registered or licensed brokers or dealers if required under applicable state
securities laws. In addition, in certain states, the shares of common stock
covered hereby may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.

 

Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the shares of common stock may not simultaneously
engage in market making activities with respect to the shares of common stock
for the applicable restricted period, as defined in Regulation M, prior to the
commencement of the distribution. In addition, the selling stockholders will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including Regulation M, which may limit the timing of
purchases and sales of shares of common stock by the selling stockholders or any
other person. We will make copies of this prospectus available to the selling
stockholders and have informed them of the need to deliver a copy of this
prospectus at or prior to the time of the sale (including by compliance with
Rule 172 under the Securities Act).

 

There can be no assurance that any selling stockholder will sell any or all of
the shares of common stock we registered on behalf of the selling stockholders
pursuant to the registration statement of which this prospectus forms a part.

 

Once sold under the registration statement of which this prospectus forms a
part, the shares of common stock will be freely tradable in the hands of persons
other than our affiliates.

 

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