Exhibit 10.1

 

WARRANT EXERCISE AGREEMENT

 

This Warrant Exercise Agreement (this “Agreement”), dated as of February 14,
2020, is by and between Citius Pharmaceuticals, Inc., a Nevada corporation (the
“Company”), and the undersigned holder (each, a “Holder” and, collectively, the
“Holders”) of warrants to purchase shares of common stock of the Company, par
value $0.001 per share (the “Common Stock”), at an exercise price of $0.77 per
share, issued by the Company on September 27, 2019 in connection with its
underwritten public Offering (the “September 2019 Warrants”) and warrants to
purchase Common Stock, at an exercise price of $2.86 per share, issued by the
Company on March 29, 2018 (the “March 2019 Warrants”, and together with the
September 2019 Warrants, the “Original Warrants”).

 

WHEREAS, the Holder’s Original Warrants are exercisable into shares of Common
Stock as set forth on the Holder’s signature page hereto (the “Warrant Shares”),
which Warrant Shares issuable pursuant to the September 2019 Warrants are
currently registered pursuant to a registration statement on Form S-1 (File No.
333-233759) which became effective on September 24, 2019 (the “September 2019
Registration Statement”) and which Warrant Shares issuable pursuant to the April
2019 Warrants are currently registered pursuant to a registration statement on
Form S-1 (File No. 333-224386) which became effective on May 23, 2018 (the
“March 2018 Registration Statement” and together with the September 2019
Registration Statement, the “Registration Statements”).

 

WHEREAS, the Holder wishes to exercise all or a portion of such Original
Warrants as set forth herein and, immediately prior to such exercise and in
consideration of the Holder’s exercise of such Original Warrants, the Company
has agreed to issue the Holder of the Original Warrants, in addition to the
shares of Common Stock to which such exercising Holder is entitled, new warrants
in the form attached hereto as Exhibit A (the “New Warrants”); provided that
such New Warrants shall not be registered and shall include the legend set forth
in Section 2.2(a). The shares of Common Stock underlying the New Warrants are
referred to herein as the “New Warrant Shares” and collectively with the New
Warrants, the “Securities”. The number of shares of Common Stock underlying the
New Warrants shall be as determined pursuant to Section 2.1(c).

 

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

 

ARTICLE I

DEFINITIONS

 

Section 1.1 Definitions. Capitalized terms not defined in this Agreement shall
have the meanings ascribed to such terms in the Original Warrants.

 

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ARTICLE II

EXERCISE OF ORIGINAL WARRANT

 

Section 2.1  Exercise of Original Warrants.

 

a)  The Company and the Holder hereby agree that the Holder shall immediately
exercise (i) the September 2019 Warrants with respect to the number of Warrant
Shares set forth on the Holder's signature page hereto at an exercise price per
share equal to $0.77 per share, and (ii) the March 2018 Warrants with respect to
the number of Warrant Shares set forth on the Holder’s signature page hereto at
an exercise price per share equal to $1.02 per share, pursuant to the terms of
the Original Warrants (the “Warrant Exercise”). Notwithstanding anything herein
to the contrary, in the event that the Warrant Exercise would otherwise cause
the Holder to exceed the beneficial ownership limitation (the “Beneficial
Ownership Limitation”) as provided in Section 4.12 hereto, the Company shall
only transfer such number of Warrant Shares to the Holder (as instructed in
writing by the Holder) that would not cause such Holder to exceed the maximum
number of Warrant Shares permitted thereunder with the balance to be held in
abeyance, which abeyance shall be evidenced through the Original Warrants which
shall be deemed prepaid thereafter, and exercised pursuant to a Notice of
Exercise in the Original Warrant (provided no additional exercise shall be
payable) until the balance (or portion thereof) may be transferred to the Holder
(and deemed to be issued and outstanding by the Company) in compliance with such
Beneficial Ownership Limitations and, for the avoidance of doubt, the Warrant
Shares that are held in abeyance shall not be transferred to the Holder until
such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation. Holder shall provide written
notice to the Company promptly when any additional Warrant Shares may be
transferred to the Holder in compliance with the Beneficial Ownership
Limitation. The balance of the Warrant Shares shall be transferred to the Holder
when the Holder provides notice that the Holder holds less than the Beneficial
Ownership Limitation via The Depository Trust Company Deposit or Withdrawal at
Custodian system (“DWAC”) no later than 10:00 a.m., EST, on the 2nd Trading Day
following the date of such notice. For the avoidance of doubt, the Warrant
Shares held in abeyance pursuant to this Section 2.1 shall not be included in
the number of shares of Common Stock reported to be outstanding by the Company
in its SEC Reports.

 

b) Upon satisfaction of the covenants and conditions set forth in Section 2.3
but no later than the 2nd Trading Days following the date hereof, the closing
shall occur at the offices of H.C. Wainwright & Co., LLC (the “Placement Agent”)
or such other location as the parties shall mutually agree. The Holder shall
deliver the aggregate cash exercise price for such exercise of the Original
Warrants to the bank account set forth on the Company’s signature page hereto
within two (2) Trading Days following the date hereof and the Company shall
deliver the Warrant Shares to the Holder via the DWAC pursuant to the terms of
the Original Warrants, but pursuant to instructions set forth on the Holder’s
signature page hereto; provided, however, that per instructions from the
Placement Agent, settlement of the Shares shall occur via “Delivery Versus
Payment” (“DVP”) (i.e., on the Closing Date, the Company shall issue the Shares
registered in the Holders’ names and addresses and released by the Transfer
Agent directly to the account(s) at the Placement Agent identified by each
Holder; upon receipt of such Shares, the Placement Agent shall promptly
electronically deliver such Shares to the applicable Holder, and payment
therefor shall be made by the Placement Agent (or its clearing firm) by wire
transfer to the Company). The date of the closing of the exercise of the
Original Warrants shall be referred to as the “Closing Date”.

 

c)  Within two (2) Trading Days of the Closing Date, the Company shall deliver
to the Holder New Warrants to purchase such number of New Warrant Shares as
follows:

 

An unregistered warrant to purchase shares of Common Stock exercisable into a
number of shares of Common Stock equal to 100% of the number of Warrant Shares
received by the Holder upon such applicable exercise of the Original Warrants
with an exercise price equal to $1.02, a term of exercise equal to five (5)
years commencing on the six (6) month anniversary of the original issue date, in
the form attached hereto as Exhibit A.

 

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Section 2.2  Legends; Restricted Securities.

 

a)  The Holder understands that the New Warrants and the New Warrant Shares are
not, and will not be, registered under the Securities Act of 1933, as amended
(the “Securities Act”), or the securities laws of any state and, accordingly,
each certificate, if any, representing such securities shall bear a legend
substantially similar to the following:

 

“THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS. 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.”

 

b)  Certificates evidencing the New Warrant Shares shall not contain any legend
(including the legend set forth in Section 2.2(a) hereof), (i) while a
registration statement covering the resale of such New Warrant Shares is
effective under the Securities Act, (ii) following any sale of such New Warrant
Shares pursuant to Rule 144, (iii) if such New Warrant Shares are eligible for
sale under 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). In such event, 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.
If all or any portion of a New Warrant is exercised at a time when there is an
effective registration statement to cover the resale of the New Warrant Shares,
or if such New Warrant Shares may be sold under Rule 144 and the Company is then
in compliance with the current public information required under Rule 144, or if
the New Warrant Shares may be sold under Rule 144 without the requirement for
the Company to be in compliance with the current public information required
under Rule 144 as to such New 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 New Warrant Shares shall be issued free of all legends. The Company agrees
that at such time as such legend is no longer required under this Section
2.2(b), it will, no later than two (2) Trading Days following the delivery by
the Holder to the Company or the Transfer Agent of a certificate representing
New Warrant Shares, as the case may be, issued with a restrictive legend (such
Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to the
Holder a certificate 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 2.2(b). Certificates for securities subject to legend
removal hereunder shall be transmitted by the Transfer Agent to the Holder by
crediting the account of the Holder’s prime broker with the Depository Trust
Company System as directed by the Holder.

 

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c)  In addition to the Holder’s other available remedies, the Company shall pay
to the Holder, in cash, (i) as partial liquidated damages and not as a penalty,
for each $1,000 of New Warrant Shares (based on the VWAP of the shares of Common
Stock on the date such New Warrant Shares are submitted to the Transfer Agent)
delivered for removal of the restrictive legend, $10 per Trading Day (increasing
to $20 per Trading Day five (5) Trading Days after such damages have begun to
accrue) for each Trading Day after the Legend Removal Date until such
certificate is delivered without a legend and (ii) if the Company fails to (A)
issue and deliver (or cause to be delivered) to the Holder by the Legend Removal
Date a certificate representing the New Warrant Shares so delivered to the
Company by the Holder that is free from all restrictive and other legends and
(B) if after the Legend Removal 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 all or any portion of the number of shares of Common
Stock, or a sale of a number of shares of Common Stock equal to all or any
portion of the number of shares of Common Stock that the Holder anticipated
receiving from the Company without any restrictive legend, then, an amount equal
to the excess of the Holder’s total purchase price (including brokerage
commissions and other out-of-pocket expenses, if any) for the shares of Common
Stock so purchased (including brokerage commissions and other out-of-pocket
expenses, if any) over the product of (1) such number of New Warrant Shares that
the Company was required to deliver to the Holder by the Legend Removal Date
multiplied by (2) the price at which the sell order giving rise to such purchase
obligation was executed.

 

Section 2.3 Issuance of Press Release. Prior to 4:00 p.m. (New York City time)
on the date hereof, the Company shall issue a press release disclosing the
material terms of the transactions contemplated hereby and within the time
required by the laws file a Current Report on Form 8-K with the Commission,
which shall include a form of this Agreement. From and after the issuance of the
press release, the Company represents to the Holder that it shall not be in
possession of any material, nonpublic information received from the Company, any
of its Subsidiaries or any of their respective officers, directors, employees or
agents that is not disclosed in press release. In addition, effective upon the
issuance of the 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, any of its Subsidiaries or any of their respective
officers, directors, affiliates, employees or agents, on the one hand, and the
Holder or any of its affiliates, on the other hand, shall terminate.

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

Section 3.1  Representations and Warranties of the Company. The Company hereby
makes the representations and warranties set forth below to the Holder that as
of the date of its execution of this Agreement:

 

a)  Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
this Agreement and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of such Company and no further
action is required by such Company, its board of directors or its shareholders
in connection therewith. This Agreement has been duly executed by the Company
and, when delivered in accordance with the terms hereof will constitute the
valid and binding obligation of the Company enforceable against the Company 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.

 

b)  Organization. The Company is a duly organized and validly existing
corporation in good standing under the laws of the State of Nevada.

 

c)  Registration Statements. The Warrant Shares are registered for issuance to
the Holder under the Registration Statements, and the Company knows of no
reasons why such Registration Statements shall not remain available for the
issuance of such Warrant Shares for the foreseeable future. The Company shall
use commercially reasonable efforts to keep the Registration Statements
effective and available for use by the Holder until all Warrant Shares are
issued to the Holder. The Company shall file a Prospectus Supplement pursuant to
Rule 424(b) with the Commission, reducing the exercise price of the March 2018
Warrants.

 

d)  No Conflicts. The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions contemplated
hereby do not and will not: (i) conflict with or violate any provision of the
Company’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, result in the creation of any lien upon any of the properties or
assets of the Company, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any material agreement, credit facility, debt or other material instrument
(evidencing Company debt or otherwise) or other material understanding to which
the Company is a party or by which any property or asset of the Company is bound
or affected, or (iii) conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations and the Company’s principal
trading market), or by which any property or asset of the Company is bound or
affected.

 

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e)  Subsequent Sales

 

i.From the date hereof until the end of the 30 days following the date hereof,
neither the Company nor any subsidiary of the Company shall issue, enter into
any agreement to issue or announce the issuance or proposed issuance of any
shares of Common Stock or any securities of the Company or any subsidiary of the
Company which would entitle the holder thereof to acquire at any time Common
Stock, including, without limitation, any debt, preferred stock, right, option,
warrant or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock (“Common Stock Equivalent”).

 

ii.From the date hereof until the first (1st) year anniversary of the Closing
Date, the Company shall be prohibited from effecting or entering into an
agreement to effect any issuance by the Company or any of its subsidiaries of
Common Stock or Common Stock Equivalents (or a combination of units thereof)
involving a Variable Rate Transaction. “Variable Rate Transaction” means a
transaction in which the Company (i) issues or sells any debt or equity
securities that are convertible into, exchangeable or exercisable for, or
include the right to receive additional shares of Common Stock either (A) at a
conversion price, exercise price or exchange rate or other price that is based
upon and/or varies with the trading prices of or quotations for the shares of
Common Stock at any time after the initial issuance of such debt or equity
securities, or (B) with a conversion, exercise or exchange price that is subject
to being reset at some future date after the initial issuance of such debt or
equity security or upon the occurrence of specified or contingent events
directly or indirectly related to the business of the Company or the market for
the Common Stock or (ii) enters into, or effects a transaction under, any
agreement, including, but not limited to, an equity line of credit, whereby the
Company may issue securities at a future determined price. Any Purchaser shall
be entitled to obtain injunctive relief against the Company to preclude any such
issuance, which remedy shall be in addition to any right to collect damages.

 

f)  Disclosure. Except with respect to the material terms and conditions of the
transactions contemplated by this Agreement, the Company confirms that neither
it nor any other Person acting on its behalf has provided the Holder or any of
its agents or counsel with any information that it believes constitutes or might
constitute material, non-public information. The Company understands and
confirms that the Holder will rely on the foregoing representation in effecting
transactions in securities of the Company. All of the disclosure furnished by or
on behalf of the Company to the Holder regarding the Company and its
Subsidiaries, their respective businesses and the transactions contemplated
hereby, including but not limited to the disclosure set forth in the SEC
Reports, is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. As used herein, “SEC Reports” means all reports,
schedules, forms, statements and other documents required to be filed by the
Company with the Commission pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended, including all exhibits included
therein and financial statements, notes and schedules thereto and documents
incorporated by reference therein.

 

g)  Issuance of Securities. The issuance of the New Warrants is duly authorized
and, upon issuance in accordance with the terms of this Agreement, the New
Warrants shall be validly issued and free from all preemptive or similar rights
(except for those which have been validly waived prior to the date hereof),
taxes, liens and charges and other encumbrances with respect to the issue
thereof. As of the Closing Date, a number of shares of Common Stock shall have
been duly authorized and reserved for issuance which equals or exceeds the
maximum number of New Warrant Shares issuable upon exercise of the New Warrants
(without taking into account any limitations on the exercise of the New Warrants
set forth therein). Upon exercise of the New Warrant in accordance with the
terms of the New Warrant, the New Warrant Shares when issued will be validly
issued, fully paid and nonassessable and free from all preemptive or similar
rights, taxes, liens, charges and other encumbrances with respect to the issue
thereof, with the holders being entitled to all rights accorded to a holder of
shares of Common Stock. Assuming the accuracy of each of the representations and
warranties set forth in Section 3.2 of this Agreement, the offer and issuance by
the Company of the New Warrant is exempt from registration under the Securities
Act.

 

h)  No General Solicitation. Neither the Company, nor any of its Subsidiaries or
affiliates, nor any Person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the New Warrants.

 

i)  No Disqualification Events. With respect to Securities to be offered and
sold hereunder in reliance on Rule 506(b) under the Securities Act, none of the
Company, any of its predecessors, any affiliated issuer, any director, executive
officer, other officer of the Company, 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
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 Buyers a copy of any disclosures provided thereunder, if any.

 

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Section 3.2  Representations and Warranties of the Holder. The Holder hereby
makes the representations and warranties set forth below to the Company that as
of the date of its execution of this Agreement:

 

a)  Due Authorization. The Holder represents and warrants that (i) the execution
and delivery of this Agreement by it and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
action on its behalf and (ii) this Agreement has been duly executed and
delivered by the Holder and constitutes the valid and binding obligation of the
Holder, enforceable against it in accordance with its terms.

 

b)  No Conflicts. The execution, delivery and performance of this Agreement by
the Holder and the consummation by the Holder of the transactions contemplated
hereby do not and will not: (i) conflict with or violate any provision of the
Holder’s organizational or charter documents, or (ii) conflict with or result in
a violation of any agreement, law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
which would interfere with the ability of the Holder to perform its obligations
under this Agreement.

 

c)  Access to Information. The Holder acknowledges that it has had the
opportunity to review this Agreement and the SEC Reports and has been afforded
(i) the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Company concerning the terms and
conditions of the exercise of the Original Warrants and issuance of the New
Warrants and the merits and risks of investing in the Warrant Shares underlying
the Original Warrants; (ii) access to information about the Company and its
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment. The Holder
acknowledges and agrees that neither H.C. Wainwright & Co., LLC (the “Agent”)
nor any Affiliate of the Agent has provided the Holder with any information or
advice with respect to the Original Warrants, the Warrant Shares or the
Securities nor is such information or advice necessary or desired. Neither the
Agent nor any Affiliate of the Agent has made or makes any representation as to
the Company or the quality of the Original Warrants, the Warrant Shares or the
Securities, and the Agent and any Affiliate of the Agent may have acquired
non-public information with respect to the Company which the Holder agrees need
not be provided to it. In connection with the issuance of the Warrant Shares and
the Securities to the Holder, neither the Agent nor any of its Affiliates has
acted as a financial advisor or fiduciary to the Holder.

 

d)  Holder Status. The Holder is an “accredited investor” as defined in Rule 501
under the Securities Act.

 

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ARTICLE IV

MISCELLANEOUS

 

Section 4.1  Favorable Agreement. The Company hereby represents and warrants as
of the date hereof and covenants and agrees that none of the terms offered to
any one Holder hereunder (or any amendment, modification or waiver thereof), is
or will be more favorable to any one Holder than those of the other Holder and
this consent.

 

Section 4.2 Other Warrant Exercise Agreement.  The Company acknowledges and
agrees that the obligations of the Holder under this Agreement are several and
not joint with the obligations of any other holder or any other holders of
Warrants to Purchase Common Stock of the Company (each, an “Other Holder”) under
any other agreement related to the exercise of such Original Warrants (“Other
Warrant Exercise Agreement”), and the Holder shall not be responsible in any way
for the performance of the obligations of any Other Holder or under any such
Other Warrant Exercise Agreement. Nothing contained in this Agreement, and no
action taken by the Holder pursuant hereto, shall be deemed to constitute the
Holder and the Other Holders as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Holder and the
Other Holders are in any way acting in concert or as a group with respect to
such obligations or the transactions contemplated by this Agreement and the
Company acknowledges that the Holder and the Other Holders are not acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement or any Other Warrant Exercise Agreement. The
Company and the Holder confirms that the Holder has independently participated
in the negotiation of the transactions contemplated hereby with the advice of
its own counsel and advisors. The Holder shall be entitled to independently
protect and enforce their rights, including, without limitation, the rights
arising out of this Agreement, and it shall not be necessary for any Other
Holder to be joined as an additional party in any proceeding for such purpose.

 

Section 4.3 Notices.  Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be made by email to the
email address of the Holder set forth on such Holder’s signature page.

 

Section 4.4 Survival.  All warranties and representations (as of the date such
warranties and representations were made) made herein or in any certificate or
other instrument delivered by any party hereto or on its behalf under this
Agreement shall be considered to have been relied upon by the parties hereto and
shall survive the issuance of the Warrant Shares. This Agreement shall inure to
the benefit of and be binding upon the successors and permitted assigns of each
of the parties; provided, however, that no party may assign this Agreement or
the obligations and rights of such party hereunder without the prior written
consent of the other parties hereto.

 

Section 4.5  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 the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, 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 signature page
were an original thereof.

 

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Section 4.6 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

 

Section 4.7  Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined pursuant to
the Governing Law provision in Section 5(e) of the Original Warrants.

 

Section 4.8  Entire Agreement. The Agreement, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof 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.

 

Section 4.9  Construction. 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. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

 

Section 4.10  Fees and Expenses. Each party shall pay the fees and expenses of
its advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement. The Company shall pay all
transfer agent fees, stamp taxes and other taxes and duties levied in connection
with the delivery of any Warrant Shares.

 

Section 4.11 Registration Obligations. The Company shall prepare and file with
the Commission a registration statement relating to the resale of the New
Warrant Shares by the holders of the New Warrants under the Securities Act and
use commercially reasonable best efforts to cause such registration statement to
be declared effective by the Commission as soon as practical.

 

Section 4.12 Beneficial Ownership Limitation. The parties hereby agree that the
Beneficial Ownership Limitation for the Original Warrant for purposes of this
agreement is [4.99/9.99%].

 

*******************

 

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IN WITNESS WHEREOF, the undersigned have executed this Warrant Exercise
Agreement as of the date first written above.

 

COMPANY:         CITIUS PHARMACEUTICALS, INC.         By:      Name:     Title:
   

Bank Account and Wire Instructions:

 

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[HOLDER SIGNATURE PAGES TO CTXR

WARRANT EXERCISE AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned have caused this Warrant Exercise Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.

 

        Name of Holder:  
                                                                                  
    Signature of Authorized Signatory of Holder:
                                                           
Name of Authorized Signatory:                                  
Title of Authorized Signatory:  
 
          Email Address of Holder:  
 
          Number of Warrant Shares underlying Original Warrants to be exercised:
                  Aggregate Exercise Price of Original Warrants to be Exercised:

$ 

   

New Warrant Shares underlying New Warrants:

       

DWAC Instructions for Warrant Shares to be issued upon exercise of Original
Warrants:_________________

                       

Deliver address of New
Warrants: _____________________________________________________________________

 

 

 

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