Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is dated as of March 3,
2014, 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”).

 

WHEREAS, on the terms and subject to the conditions set forth in this Agreement
and pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”), 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.

 

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 before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign),
including without limitation the Commission.

 

“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.

 

“Auditors” shall have the meaning ascribed to such term in Section 3.11.

 

“Benefit Plans” shall have the meaning ascribed to such term in Section 3.3.

 

“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.

 

“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.

 

“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.

 

“Common Stock Equivalents” means any securities of the Company which would
entitle the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, right,

 

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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.

 

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

 

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

 

“Disclosure Schedules” shall have the meaning ascribed to such term in
ARTICLE III.

 

“Effective Date” means the earliest of the date that (a) the initial
Registration Statement has been declared effective by the Commission, (b) all of
the Registrable Securities have been sold pursuant to Rule 144 or may be sold
pursuant to Rule 144 without the requirement for the Company to be in compliance
with the current public information required under Rule 144 and without volume
or manner-of-sale restrictions or (c) following the one year anniversary of the
Closing Date provided that a holder of Registrable Securities is not an
Affiliate of the Company, all of the Registrable Securities may be sold pursuant
to an exemption from registration under Section 4(1) of the Securities Act
without volume or manner-of-sale restrictions and Company counsel has delivered
to such holders a standing written unqualified opinion that resales may then be
made by such holders of the Registrable Securities pursuant to such exemption
which opinion shall be in form and substance reasonably acceptable to such
holders.

 

“Environmental Laws” shall have the meaning ascribed to such term in
Section 3.17.

 

“ERISA” shall have the meaning ascribed to such term in Section 3.17.

 

“Evaluation Date” shall have the meaning ascribed to such term in Section 3.10.

 

“Except as disclosed in the SEC Reports” shall be construed to mean only those
matters that are reasonably apparent and fairly disclosed in the SEC Reports
(excluding any disclosures set forth in any risk factor section and in any
section relating to forward-looking statements to the extent they are
cautionary, predictive or forward-looking).  For purposes of this definition,
“SEC Reports” shall only include SEC Reports filed with or furnished to the
Commission since January 1, 2012.

 

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

 

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

 

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

 

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

 

“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

 

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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.

 

“Legend Removal Date” shall have the meaning ascribed to such term in
Section 5.1(c).

 

“Lien” means any deed of trust, mortgage, pledge, hypothecation, assignment,
deposit or preferential arrangement, right of first refusal, charge,
encumbrance, lien, statutory lien of any kind or nature (including landlord’s,
warehousemen’s, carriers’, mechanics’, suppliers’, materialmen’s, repairmen’s or
other like liens), or other security agreement or security interest of any kind
or nature whatsoever, including any conditional sale or other title retention
agreement and any capital or financing lease having substantially the same
economic effect as any of the foregoing, but excluding any non-exclusive license
of intellectual property and any restriction imposed under applicable securities
laws.

 

“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, or (ii) the ability of
the Company to perform its obligations under the Transaction Documents.

 

“Nasdaq” means The NASDAQ Stock Market, LLC.

 

“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.

 

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

 

“Principal Purchasers” means The Pyramid Peak Foundation and J.R. Hyde, III and
their respective successors and assigns.

 

“Purchaser Party” shall have the meaning ascribed to such term in Section 5.7.

 

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

 

“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of the Closing Date, among the Company and the Purchasers, in the form of
Exhibit B attached hereto.

 

“Registration Statement” means a registration statement meeting the requirements
set forth in the Registration Rights Agreement and covering the resale by the
Purchasers of the Shares and the Warrant Shares.

 

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

 

“Rule 506(d) Related Party” shall have the meaning ascribed to such term in
Section 4.2.

 

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

 

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

 

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

 

“Shares” shall have the meaning ascribed to such term in Section 2.1.

 

“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
MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the New York Stock Exchange (or any successors to any of the
foregoing).

 

“Transaction Documents” means this Agreement, the Warrants, the Registration
Rights Agreement, 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” shall have the meaning ascribed to such term in Section 2.1.

 

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

 

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

 

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

 

“Warrant Shares” shall have the meaning ascribed to such term in Section 2.1.

 

“Warrants” shall have the meaning ascribed to such term in Section 2.1.

 

ARTICLE 2
PURCHASE AND SALE

 

2.1          Purchase and Sale.  Upon the terms and subject to the conditions
set forth in this Agreement, the Company shall issue and sell to the Purchasers,
and the Purchasers shall, severally and not jointly, purchase from the Company
an aggregate of 11,976,048 immediately separable Units (each a “Unit” and
collectively, the “Units”) in the amounts set forth opposite their respective
names on Exhibit A, at a price per Unit equal to $ $1.77625001336 (the “Price
Per Unit” and the purchase price for the Units, the “Unit Purchase Price”), each
Unit consisting of one share of Common Stock (each a “Share” and collectively,
the “Shares”) and a warrant (each a “Warrant’ and collectively, the “Warrant”)
to purchase 0.85 of a share of Common Stock (collectively, the “Warrant
Shares”).

 

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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 3175 Hanover Street, Palo Alto, California, three
Business Days following the satisfaction or waiver of the conditions set forth
in Section 2.4, 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”).  At the Closing, the Unit Purchase Price shall be paid
by the applicable Purchasers in cash, by wire transfer of immediately available
funds, to an account previously designated in writing by the Company against the
issuance by the Company of the Units, and the Company shall instruct its
transfer agent to deliver to the Purchasers, via physical certificate, the
Shares comprising the Units such Purchasers are purchasing hereunder and shall
deliver the Warrants to the Purchasers.

 

2.3          Deliveries.

 

(a)           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)           the Registration Rights Agreement duly executed by the Company;

 

(iii)          a copy of the irrevocable instructions to the Transfer Agent
instructing the Transfer Agent to deliver to such Purchaser, on an expedited
basis, a certificate evidencing the number of Shares set forth opposite such
Purchaser’s name on Exhibit A hereto, registered in the name of such Purchaser;

 

(iv)          Warrants substantially in the form attached hereto as Exhibit C,
registered in the name of such Purchaser to purchase up to a number of shares of
Common Stock set forth opposite their respective names on Exhibit A hereto (such
Warrant certificates to be delivered as promptly as practicable after the
Closing Date but no in no event more than five Trading Days after the Closing
Date);

 

(v)           the Company shall have delivered a Certificate, executed on behalf
of the Company by its Chief Executive Officer and its acting Chief Financial
Officer, dated as of the Closing Date, certifying to the fulfillment of the
conditions specified in subsections (i), (ii), (iv), (v), (vi) and (vii) of
Section 2.4(b);

 

(vi)          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 of the Company approving the
transactions contemplated by this Agreement and the other 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;

 

(vii)         the Company shall have requested and caused Cooley LLP, counsel
for the Company, to have furnished to the Purchasers, a customary legal opinion
reasonably satisfactory to the Purchasers; and

 

(viii)        A Nasdaq Listing of Additional Shares notification form.

 

(b)           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;

 

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(ii)           the Registration Rights Agreement duly executed by such
Purchaser; and

 

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

 

2.4          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 2.3(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.

 

(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 III 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 III
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 2.3(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 could 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;

 

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(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; and

 

(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.

 

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company hereby represents and warrants to the Purchasers that, except as
otherwise disclosed to the Purchasers:

 

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 authority to carry on its business as now conducted and to own its
properties.  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.

 

3.2          Authorization; Enforcement.  The Company has all corporate right,
power and authority to enter into the Transaction Documents and to consummate
the transactions 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 120,000,000 shares of Common Stock, of which 63,185,389 shares are
outstanding as of the date hereof (prior to the issuance of the Units). 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 nonassessable. Except
(i) for options to purchase Common Stock or other equity awards (including
restricted stock units) issued to employees and members of the Board of
Directors pursuant to the equity compensation plans or arrangements disclosed in
the SEC Reports, (ii) shares of capital stock issuable and reserved for issuance
pursuant to securities exercisable for, or convertible into or exchangeable for
any shares of capital stock of the Company disclosed in the SEC Reports, and
(iii) 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.  The issue and sale of the Units will not
result in the right of any holder of Company securities to adjust the exercise,
conversion or exchange price under such securities.

 

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3.4          Issuance; Reservation of Shares.  The issuance of the Shares has
been duly and validly authorized by all necessary corporate and stockholder
action, and the 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 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 nonassessable, and shall be free and clear of all
encumbrances (other than as provided in the Transaction Documents).  The Company
has reserved, and 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.

 

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 under (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), or (ii)(a) any statute, rule, regulation or order 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
(b) except for any such conflict, breach, violation or default that would not
reasonably be expected to have a Material Adverse Effect, 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.

 

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.

 

3.7          SEC Reports.  The Company has filed all reports, schedules, forms,
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, since January 1, 2012 (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 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 not received any letters
of comment from the staff of the Commission that have not been satisfactorily
resolved as of the date hereof.

 

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 applied on a consistent basis during the periods involved
(“GAAP”), 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.

 

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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.

 

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, 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
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 “Sarbanes-Oxley
Act”)..

 

3.11        Accountant.  To the Company’s knowledge, Ernst & Young LLP (the
“Auditor”), which has expressed its opinion with respect to the Company’s
financial statements as of December 31, 2012 and 2011, 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 knowledge of the Company, 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, could reasonably be expected to result in any 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.

 

3.13        Tax Matters.  The Company has filed all federal, state, local and
foreign income and franchise tax returns required 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  and 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 or as would not have a Material Adverse Effect, except
as set forth in or contemplated in the SEC Reports.

 

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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 with any
and all applicable federal, state, local and foreign laws, rules, regulations,
decisions and orders relating to the protection of human health and safety, the
environment or 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 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.

 

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) described in the SEC Reports as being owned
by it, in each case free and clear of all liens, claims, security interests,
other encumbrances or defects except as described in the SEC Reports, and except
those that could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.  The property held under

 

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lease by the Company is held under valid, subsisting and enforceable leases 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.  Except as set
forth in the SEC Reports, (A) to the knowledge of the Company, 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 the knowledge of the Company, 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 knowledge of the Company, 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.

 

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. The tests and preclinical and clinical
studies conducted by or on behalf of the Company that are described in the SEC
Reports 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 contained in the SEC Reports are accurate in all material respects; 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 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

 

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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.  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.  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 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                        Certain Fees.  No brokerage or finder’s fees or
commissions are or will be payable by the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other
Person with respect to the transactions contemplated by the Transaction
Documents.  The Purchasers shall have no 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 that may be due in connection with the
transactions contemplated by the Transaction Documents.

 

3.24                        No Directed Selling Efforts or General
Solicitation.  Neither the Company nor 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 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(2) for the exemption from registration for
the transactions contemplated hereby or would require registration of the Shares
under the Securities Act.

 

3.26                        Private Placement.  Assuming the accuracy of the
Purchasers’ representations and warranties set forth in ARTICLE IV, 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.

 

3.27                        Form S-3 Eligibility.  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 knowledge of the Company, 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

 

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employee from corporate funds; (C) violated or is in violation of any provision
of the Foreign Corrupt Practices Act of 1977; or (D) made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.

 

3.30                        Regulation M Compliance.  The Company has not, and
to its 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.

 

3.31                        Disclosure.  No representation or warranty by the
Company in this Agreement 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.

 

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 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.

 

(a)                                 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.  Each Purchaser is acting alone
in its determination as to whether to invest in the Securities. Each such
Purchaser has delivered a questionnaire in form reasonably satisfactory to the
Company with respect to the “bad actor” provisions of Rule 506(d) promulgated
under the Securities Act. Each such Purchaser is not party to any voting
agreements or similar arrangements with respect to the Securities, except the
Registration Rights Agreement, and that certain Amended and Restated
Registration Rights Agreement dated as of August 7, 2003, as amended by that
certain Waiver and Amendment Agreement, dated as of the date hereof.  Each 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, provided, that J.R. Hyde, III may be viewed as a group with those
persons and entities as described on the Schedule 13D/A filed with the
Commission by J.R. Hyde III on July 5, 2011. 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

 

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has not given any commitment or assurance to, any person or entity 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 or
entity 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.

 

(b)                                 Each Purchaser has disclosed in writing to
the Company a description of all Derivative Transactions (as defined below) by
each such Purchaser in effect as of the date hereof, including the date of the
transactions and the class, series and number of securities involved in, and the
material economic terms of, such Derivative Transactions. For purposes of this
Agreement, a “Derivative Transaction” means any agreement, arrangement, interest
or understanding entered into by, or on behalf or for the benefit of, any
Purchaser or any of its affiliates or associates, whether record or beneficial:
(w) the value of which is derived in whole or in part from the value of any
class or series of shares or other securities of the Company, (x) which
otherwise provides any direct or indirect opportunity to gain or share in any
gain derived from a change in the value of securities of the Company, (y) the
effect or intent of which is to mitigate loss, manage risk or benefit of
security value or price changes, or (z) which provides the right to vote or
increase or decrease the voting power of, such Purchaser, or any of its
affiliates or associates, with respect to any securities of the Company, which
agreement, arrangement, interest or understanding may include, without
limitation, any option, warrant, debt position, note, bond, convertible
security, swap, stock appreciation right, short position, profit interest,
hedge, right to dividends, voting agreement, performance-related fee or
arrangement to borrow or lend shares (whether or not subject to payment,
settlement, exercise or conversion in any such class or series), and any
proportionate interest of such Purchaser in the securities of the Company held
by any general or limited partnership, or any limited liability company, of
which such Purchaser is, directly or indirectly, a general partner or managing
member.

 

4.3                               General Solicitation.  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.

 

4.4                               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.

 

4.5                               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.

 

4.6                               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 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. 
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.

 

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4.7                               Interested Stockholders.  Each Purchaser that
is an “Interested Stockholder” (as such term is defined in Section 203 of the
Delaware General Corporate Law) represents and warrants that it has been an
Interested Stockholder for at least three years prior to the date hereof.

 

4.8                               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.

 

4.9                               Commissions.  No Person will have, as a result
of the transactions contemplated by the Transaction Documents, any valid right,
interest or claim against or upon the Company or a Purchaser for any commission,
fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of such Purchaser.

 

The Company acknowledges and agrees that the representations contained in
ARTICLE IV 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

OTHER AGREEMENTS OF THE PARTIES

 

5.1                               Transfer Restrictions.

 

(a)                                 The Securities may only be disposed of in
compliance with state and federal securities laws.  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 or in connection with a pledge as contemplated in
Section 5.1(b), 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 5.1, of a legend on any of the Securities in
the following form:

 

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.

 

(c)                                  Certificates evidencing the Shares and
Warrant Shares shall not contain any legend (including the legend set forth in
Section 5.1(b) hereof), (i) while a registration statement (including the
Registration Statement) covering the resale of such security is effective under
the Securities Act, (ii) following any sale of such Shares or Warrant Shares
pursuant to Rule 144, (iii) if such 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

 

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under Rule 144 as to such Shares and Warrant Shares and without volume or
manner-of-sale restrictions, 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).  The
Company shall cause its counsel to issue a legal opinion to the Transfer Agent
promptly after the Effective Date if required by the Transfer Agent to effect
the removal of the legend hereunder.  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 Shares or 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 Shares or 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 Shares or 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 the Effective Date or at such time as such legend is no longer
required under this Section 5.1(c), it will, no later than three Trading Days
following the delivery by a Purchaser to the Company or the Transfer Agent of a
certificate representing Shares or Warrant Shares, as the case may be, issued
with a restrictive legend (such third Trading Day, the “Legend Removal Date”),
deliver or cause to be delivered to such Purchaser 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 5.1. 
Certificates for Securities subject to legend removal hereunder shall 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.

 

5.2                               Furnishing of Information; Public
Information.  Until the earliest of the time that (i) no Purchaser owns
Securities or (ii) the Warrants have expired, the Company covenants to maintain
the registration of the Common Stock under Section 12(b) of the Exchange Act and
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 the Exchange Act.

 

5.3                               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 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.

 

5.4                               Securities Laws Disclosure; Publicity.  The
Company shall (a) by 9:30 a.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 in a form reasonably
satisfactory to the Principal Purchasers, 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.  The Company shall
consult with the Principal Purchasers in issuing any other press releases with
respect to the transactions contemplated hereby, and the Company shall not issue
any such press release nor otherwise make any such public statement without the
prior consent of the Principal Purchasers (which consent shall not unreasonably
be withheld or delayed) or, with respect to the public disclosure of the
identity of any Purchaser, the prior consent of such Purchaser, except if such
disclosure is required by law, in which case the Company shall promptly provide
the Purchasers with prior notice of such public statement or communication.

 

5.5                               Shareholder Rights Plan.  Solely to the extent
that it would impair the ability of any Purchaser to receive Securities under
the Transaction Documents, no claim will be made or enforced by the Company or,
with the consent of the Company, any other Person, that any Purchaser is an
“Acquiring Person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar
anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan
or arrangement.

 

16

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5.6                               Use of Proceeds.  The Company shall use the
net proceeds from the sale of the Securities hereunder for funding operations or
for working capital or other general corporate purposes.

 

5.7                               Indemnification of Purchasers.  Subject to the
provisions of this Section 5.7, 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, 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 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 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.  The indemnification required by this Section 5.7 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.

 

5.8                               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 issue Shares pursuant to this
Agreement and Warrant Shares pursuant to any exercise of the Warrants.

 

5.9                               Listing of Common Stock.  The Company hereby
agrees to use reasonable best efforts to maintain the listing or quotation of
the Common Stock on the Trading Market on which it is currently listed, and, as
promptly as practicable following the Closing, to secure the listing of all of
the Shares and Warrant Shares on such Trading Market.  The Company further
agrees, if the Company applies to have the Common Stock traded on any other
Trading Market, it will then include in such application all of the Shares and
Warrant Shares, and will take such other action as is necessary to cause all of
the Shares and Warrant Shares to be listed or quoted on such other Trading
Market as promptly as possible.  The Company will then take all action
reasonably necessary to continue the listing or quotation and trading of its
Common Stock on a Trading Market and will comply in all respects with

 

17

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the Company’s reporting, filing and other obligations under the bylaws or
rules of the Trading Market.  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 5.9 and Section 3.24.

 

5.10                        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.

 

5.11                        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 5.11.

 

5.12                        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 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.

 

5.13                        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.

 

ARTICLE 6

TERMINATION

 

6.1                               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 2.4(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 2.4(b) shall have become
incapable of fulfillment, and shall not have been waived by such Purchaser; or

 

18

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(d)                                 By either the Company or any Purchaser (with
respect to itself only) if the Closing has not occurred on or prior to April 15,
2014; provided, however, that the Principal Purchasers may, in their sole
discretion, extend such date to August 15, 2014, in the event shareholder
approval is required;

 

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.

 

6.2                               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 VI, 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 VI 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 7

MISCELLANEOUS

 

7.1                               Fees and Expenses.  The parties hereto shall
pay their own costs and expenses in connection herewith, including all
attorneys’ fees.

 

7.2                               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.

 

7.3                               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 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 set forth on the signature
pages 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,
3175 Hanover Street, Palo Alto, California 94304 (facsimile: 650-849-740),
Attention: Chadwick L. Mills; and

 

(ii)                                  if to the Purchasers, to their respective
addresses as set forth on Exhibit A attached hereto, with a copy to Matthew S.
Heiter, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, 165 Madison Avenue,
Suite 2000,  Memphis, TN  38103; Fax:  901.577.0737.

 

7.4                               Amendments; Waivers.  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.  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

 

19

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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.

 

7.5                               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.

 

7.6                               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, provided, further that 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.”

 

7.7                               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 Section 5.7.

 

7.8                               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.

 

7.9                               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.

 

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

 

7.11                        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.

 

7.12                        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

 

20

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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.

 

7.13        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.

 

7.14        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.

 

7.15        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.

 

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

 

21

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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:

President and Chief Operating 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.

 

 

J.R. HYDE, III

 

 

 

 

 

By:

/s/ 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.

 

 

 

THE PYRAMID PEAK FOUNDATION

 

 

 

 

 

By:

/s/ Andrew R. McCarroll

 

Name:

Andrew R. McCarroll

 

Title:

Secretary

 

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

 

EXHIBIT A
SCHEDULE OF PURCHASERS

 

Purchaser

 

Units
Purchased

 

Number of
Shares of
Common Stock
Separable from
Units
Purchased

 

Number of Shares
of Common Stock
Exercisable from
Warrants
Separable from
Units Purchased

 

Price Per Unit

 

Total Consideration

 

J.R. Hyde, III

17 West Pontotoc Ave., Suite 200

Memphis, TN 38103

(901) 685-3412

 

5,988,024

 

5,988,024

 

5,089,821

 

$

1.77625001336

 

$

10,636,227.71

 

 

 

 

 

 

 

 

 

 

 

 

 

The Pyramid Peak Foundation 6410 Poplar Ave. Ste 900 Memphis, Tennessee 38119

 

5,998,024

 

5,988,024

 

5,089,821

 

$

1.77625001336

 

$

10,636,227.71

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL

 

11,976,048

 

11,976,048

 

10,179,642

 

 

 

$

21,272,455.42

 

 

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

 

EXHIBIT B

FORM OF REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is made as of March [·],
2014 by and among GTx, Inc., a corporation organized and existing under the laws
of the State of Delaware (the “Company”),The Pyramid Peak Foundation (“PPF”),
J.R. Hyde III (“JRH and together with PPF, the “Principal Purchasers”) and the
other purchasers named in the Purchase Agreement (as defined below)
(collectively, the “Purchasers”).

 

RECITALS

 

WHEREAS, the Company and the Purchasers are parties to a Securities Purchase
Agreement, dated as of March [·], 2014 (the “Purchase Agreement”), pursuant to
which the Purchasers are purchasing an aggregate of [·] immediately separable
Units, each Unit consisting of one share of Common Stock and a Warrant (as
defined in the Purchase Agreement) to purchase one (1) share of Common Stock;
and

 

WHEREAS, in connection with the consummation of the transactions contemplated by
the Purchase Agreement, and pursuant to the terms of the Purchase Agreement, the
parties desire to enter into this Agreement in order to grant certain rights to
the Purchasers as set forth below.

 

NOW, THEREFORE, in consideration of the covenants and promises set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:

 

AGREEMENT

 

1.             Certain Definitions. Unless the context otherwise requires, the
following terms, for all purposes of this Agreement, shall have the meanings
specified in this Section 1.

 

“Affiliate” has the meaning set forth in Rule 12b-2 of the rules and regulations
promulgated under the Exchange Act; provided, however, that for purposes of this
Agreement, the Purchasers and their Affiliates, on the one hand, and the Company
and its Affiliates, on the other, shall not be deemed to be “Affiliates” of one
another.

 

“Allowed Delay” has the meaning set forth in Section 2.1(b)(ii).

 

“Beneficially Own,” “Beneficially Owned,” or “Beneficial Ownership” have the
meaning set forth in Rule 13d-3 of the rules and regulations promulgated under
the Exchange Act.

 

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

 

“Business Days” has the meaning ascribed to such term in the Purchase Agreement.

 

“Change of Control” means the consummation of any transaction or series of
related transactions involving (i) any purchase or acquisition (whether by way
of tender offer, exchange offer, merger, consolidation, amalgamation, scheme or
arrangement, acquisition, business combination or similar transaction or
otherwise) by any Person or group (within the meaning of 13(d)(3) of the
Exchange Act) of any of (A) securities representing a majority of the
outstanding voting power of the Company entitled to elect the Board or (B) the
majority of the outstanding Common Stock, (ii) any sale, lease, exchange,
transfer, exclusive worldwide license or disposition of all or substantially all
of the assets of the Company, taken together as a whole, to such Person or
group, (iii) any merger, consolidation, amalgamation, scheme or arrangement,
acquisition, business combination or similar transaction in which the holders of
shares of the Common Stock and any other securities of the Company having the
ordinary power to vote in the election of members of the Board of the Company
and any securities convertible,

 

1

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exchangeable for or otherwise exercisable to acquire voting securities
immediately prior to the transaction, as a group, do not hold securities
representing a majority of the outstanding voting power entitled to elect the
board of directors of the surviving entity in such merger, consolidation,
amalgamation, scheme or arrangement, acquisition, business combination or
similar transaction or (iv) a liquidation, dissolution or winding up of the
Company.

 

“Closing Date” has the meaning ascribed to such term in the Purchase Agreement.

 

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

 

“Common Stock” means shares of the common stock, par value $0.001 per share, of
the Company.

 

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

 

“Filing Deadline” has the meaning set forth in Section 2.1(a).

 

“FINRA” means the Financial Industry Regulatory Authority.

 

“Form S-3” means such form under the Securities Act as in effect on the date
hereof or any successor or similar registration form under the Securities Act
subsequently adopted by the Commission that permits inclusion or incorporation
of substantial information by reference to other documents filed by the Company
with the Commission.

 

“Free Writing Prospectus” means an issuer free writing prospectus, as defined in
Rule 433 under the Securities Act, relating to an offer of Registrable
Securities.

 

“Fully Diluted Basis” means all outstanding Common Stock assuming the exercise
of all outstanding stock, warrants, rights, calls, options or other securities
exchangeable or exercisable for, or convertible into, Common Stock without
regard to any restrictions or conditions with respect to the exercisability
thereof.

 

“GAAP” has the meaning ascribed to such term in the Purchase Agreement.

 

“Holder” means any person owning of record Registrable Securities that have not
been sold to the public or any transferee or assignee of record of such
Registrable Securities to which the registration rights conferred by this
Agreement have been transferred or assigned in accordance with Section 3.2
hereof.

 

“Initiating Shelf Take-Down Holder” has the meaning set forth in Section 2.1(c).

 

“Insolvency Event” means any of the following: (a) the Company files a petition
under any chapter of title 11 of the United States Code (the “Bankruptcy Code”)
or commences a proceeding under any similar law in any other jurisdiction or any
other similar law of any jurisdiction affecting creditors’ rights; makes an
assignment for the benefit of its creditors; or commences a proceeding for the
appointment of a receiver, trustee, liquidator, custodian or conservator of
itself or of the whole or substantially all of its property; (b) a petition is
filed against the Company under any chapter of the Bankruptcy Code or any
proceeding is commenced under any similar law of any other jurisdiction, or any
other similar law of any jurisdiction affecting creditors’ rights or for the
appointment of a receiver, trustee, liquidator, custodian or conservator of the
Company or of the whole or substantially all of its property and such petition
or the related proceeding remains undismissed for a period of 30 days; or the
Company by any act indicates its consent to, approval of or acquiescence in any
such petition or proceeding; (c) a court of competent jurisdiction enters an
order for relief against the Company under any chapter of the Bankruptcy Code or
any other similar law of any jurisdiction affecting creditors’ rights or enters
an order, judgment or decree appointing or authorizing a receiver, trustee,
liquidator, custodian or conservator of the Company or of the whole or
substantially all of its or their property; or a court of competent jurisdiction
or a receiver, trustee, liquidator,

 

2

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custodian or conservator, under the provisions of any law for the relief or aid
of debtors, assumes custody or control or takes possession of the Company or of
the whole or substantially all of the property of the Company; or (d) the
Company admits in writing its inability, or is generally unable, to pay its
debts as such debts become due.

 

“RRA” means the Amended and Restated Registration Rights Agreement, dated
August 7, 2003, by and between the Company and J.R. Hyde, III.

 

“RRA Holder” means the holder of the RRA Registrable Securities.

 

“RRA Registrable Securities” has the meaning ascribed to the term “Registrable
Securities” under the RRA.

 

“RRA Registration” means any registration effected pursuant to the RRA.

 

“Nasdaq” has the meaning ascribed to such term in the Purchase Agreement.

 

“Participating Holder” means with respect to any registration, any Holder of
Registrable Securities covered by the applicable Registration Statement.

 

“Person” has the meaning ascribed to such term in the Purchase Agreement.

 

“Piggyback Registrable Securities” means all Registrable Securities under this
Agreement and all RRA Registrable Securities.

 

“Principal Purchasers” has the meaning set forth in the preamble.

 

“Prospectus” means the prospectus included in any Registration Statement, all
amendments and supplements to such prospectus, including pre- and post-effective
amendments to such Registration Statement, and all other material incorporated
by reference in such prospectus.

 

“Register,” “registered” and “registration” refer to a registration effected by
preparing and filing a registration statement in compliance with the Securities
Act, and the declaration or ordering of effectiveness of such registration
statement or document.

 

“Registrable Securities” means shares of Common Stock held by the Purchasers
(whether acquired prior to, on or following the Closing Date), and any Common
Stock issued as (or issuable upon the conversion or exercise of any warrant
(including the Warrants), right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of,
any Common Stock, warrant, right or other security held by the Purchasers.
Notwithstanding the foregoing, Registrable Securities shall not include any
securities of the Company sold by any person to the public either pursuant to a
registration statement under the Securities Act or that is freely tradeable
under Rule 144.

 

“Registration Statement” means any registration statement of the Company that
covers Registrable Securities pursuant to the provisions of this Agreement filed
with, or to be filed with, the SEC under the rules and regulations promulgated
under the Securities Act, including the related Prospectus, amendments and
supplements to such registration statement, including pre- and post-effective
amendments, and all exhibits and all material incorporated by reference in such
registration statement.

 

“Registration Expenses” has the meaning set forth in Section 2.3.

 

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“Representatives” shall mean the directors, officers, employees and independent
contractors, agents or advisors (including, without limitation, attorneys,
accountants, and investment bankers) of the specified party or any of its
Subsidiaries.

 

“Rule 144” means Rule 144 as promulgated by the SEC under the Securities Act, as
such rule may be amended from time to time, or any similar successor rule that
may be promulgated by the SEC.

 

“Rule 145” means Rule 145 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

 

“SEC” or “Commission” means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.

 

“Securities Act” means the Securities Act of 1933, as amended, or any similar
successor federal statute and the rules and regulations thereunder, all as the
same shall be in effect from time to time.

 

“Shelf Registration Statement” has the meaning set forth in Section 2.1(a).

 

“Shelf Take-Down” has the meaning set forth in Section 2.1(c).

 

“Special Registration Statement” means (i) any registration statement relating
to any employee benefit plan, (ii) with respect to any corporate reorganization
or transaction under Rule 145, any registration statement related to the
issuance or resale of securities issued in such a transaction, (iii) any
registration statement related to stock issued upon conversion of debt
securities, (iv) any RRA Registration and (v) the first Registration Statement
on Form S-3 filed after the date hereof by the Company with the SEC that
registers solely a Company primary offering on a continuous basis pursuant to
Rule 415.

 

“Subsidiaries” means each corporation, limited liability company, partnership,
association, joint venture or other business entity of which any party or any of
its Affiliates owns, directly or indirectly, more than 50% of the stock or other
equity interest entitled to vote on the election of the members of the board of
directors or similar governing body.

 

“Transaction Documents” means this Agreement, the Purchase Agreement and the
Warrants (as defined in the Purchase Agreement), all exhibits and schedules
thereto and hereto and any other documents or agreement executed in connection
with the transactions contemplated hereunder or thereunder.

 

2.             Registration Rights.

 

2.1          Shelf Registration.

 

(a)           Registration Statements. On or prior to the date that is 180 days
after the Closing Date (the “Filing Deadline”), the Company shall prepare and
file with the SEC one Registration Statement on Form S-3 (or, if Form S-3 is not
then available to the Company, on such form of registration statement as is then
available to effect a registration for resale of the Registrable Securities) for
an offering to be made on a continuous basis pursuant to Rule 415 under the
Securities Act (the “Shelf Registration Statement”). Such Shelf Registration
Statement shall include the aggregate amount of Registrable Securities
(including the Shares and Warrant Shares (as defined in the Purchase Agreement))
to be registered therein and the intended methods of distribution thereof,
subject to the limitations of Form S-3. To the extent the rules and regulations
of the Commission do not permit such Shelf Registration Statement to include all
of the Registrable Securities, the Company shall use its reasonable best efforts
to register the maximum amount permitted by the Commission and the Registrable
Securities required to be

 

4

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omitted from such Shelf Registration Statement shall be determined in the sole
discretion of the Principal Purchasers.

 

(b)           Effectiveness.

 

(i)            The Company shall use reasonable best efforts to have the Shelf
Registration Statement declared effective as soon as practicable. The Company
shall notify the Purchasers by facsimile or e-mail as promptly as practicable,
and in any event, within twenty-four (24) hours, after any Registration
Statement is declared effective and shall simultaneously provide the Purchasers
with copies of any related Prospectus to be used in connection with the sale or
other disposition of the securities covered thereby. Subject to any limitations
provided herein, the Company shall cause the Shelf Registration Statement to
remain effective until the earlier to occur of: (i) the date two years from the
Closing or (ii) the date on which all of the Registrable Securities registered
under the Shelf Registration Statement are either sold pursuant to the Shelf
Registration Statement or sold or available for resale under Rule 144.

 

(ii)           For not more than twenty (20) consecutive days or for a total of
not more than forty-five (45) days in any twelve (12) month period, the Company
may suspend the use of any Prospectus included in any Registration Statement
contemplated by this Section in the event that the Company determines in good
faith that such suspension is necessary to (A) delay the disclosure of material
non-public information concerning the Company, the disclosure of which at the
time is not, in the good faith opinion of the Company, in the best interests of
the Company or (B) amend or supplement the affected Registration Statement or
the related Prospectus so that such Registration Statement or Prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the case of the Prospectus in light of the circumstances under which they
were made, not misleading (an “Allowed Delay”); provided, that the Company shall
promptly (a) notify each Purchaser in writing of the commencement of and the
reasons for an Allowed Delay, but shall not (without the prior written consent
of a Purchaser) disclose to such Purchaser any material non-public information
giving rise to an Allowed Delay, (b) advise the Purchasers in writing to cease
all sales under the Registration Statement until the end of the Allowed Delay
and (c) use commercially reasonable efforts to terminate an Allowed Delay as
promptly as practicable.

 

(c)           Shelf Take-Downs. An underwritten offering or sale of Registrable
Securities pursuant to a Shelf Registration Statement (a “Shelf Take-Down”) may
be initiated by a Principal Purchaser who is a Participating Holder (an
“Initiating Shelf Take-Down Holder”). Upon written request to the Company, the
Company shall amend or supplement the Shelf Registration Statement for such
purpose as soon as practicable. The Company shall send to each Participating
Holder in the Shelf Registration Statement written notice of such Shelf
Take-Down and, if within 5 days after the date of such notice, any such
Participating Holder shall so request in writing, the Company shall include in
such Shelf Take-Down all or any part of the Registrable Securities such
Participating Holder requests to be included, subject to Section 2.6(a)(ii), it
being understood the Company shall not be responsible for any underwriting
discounts or commissions in connection with any Shelf Take Down.

 

2.2          Piggyback Registrations. If the Company determines to prepare and
file with the SEC a Registration Statement, but excluding in all cases any
Special Registration Statements, relating to an offering for its own account or
the account of others of any of its equity securities at any time prior to [[·],
2019](1) or until such earlier date that no Registrable Securities are
outstanding, then the Company shall send to each Holder written notice of such
determination and, if within 15 days after the date of such notice, any such
Holder shall so request in writing, the Company shall include in such
Registration Statement all or any part of the Registrable Securities such Holder
requests to be registered, subject to Section 2.6(b)(ii).

 

2.3          Expenses. All expenses incident to the Company’s performance of or
compliance with this Agreement shall be paid by the Company, including
reasonable expenses of one counsel to the Participating Holders

 

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(1)  To insert the date that is 5 years from the Closing Date.

 

5

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in an amount not to exceed $50,000 in the aggregate during the term of this
Agreement, other than underwriting discounts or commissions deducted from the
proceeds in respect of any Registrable Securities, including (i) all
registration and filing fees, and any other fees and expenses associated with
filings required to be made with the SEC, FINRA or any other regulatory
authority and, if applicable, the fees and expenses of any “qualified
independent underwriter” as such term is defined in NASD Rule 2720 (or any
successor provision) and of its counsel, (ii) all fees and expenses in
connection with compliance with any securities or “Blue Sky” laws (including
fees and disbursements of counsel for the underwriters in connection with “Blue
Sky” qualifications of the Registrable Securities), (iii) all printing,
duplicating, word processing, messenger, telephone, facsimile and delivery
expenses (including expenses of printing certificates for the Registrable
Securities in a form eligible for deposit with The Depository Trust Company and
of printing Prospectuses and Free Writing Prospectuses), (iv) all fees and
disbursements of counsel for the Company and of all independent certified public
accountants of the Company (including the expenses of any special audit and cold
comfort letters required by or incident to such performance), (v) Securities Act
liability insurance or similar insurance if the Company so desires or the
underwriters so require in accordance with then-customary underwriting practice,
(vi) all fees and expenses incurred in connection with the listing of
Registrable Securities on any securities exchange or quotation of the
Registrable Securities on any inter-dealer quotation system, (vii) all
reasonable fees and disbursements of one legal counsel for the Participating
Holders, as selected by the Principal Purchasers, (viii) any reasonable fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, (ix) all fees and expenses of any special experts or other Persons
retained by the Company in connection with any registration, (x) all of the
Company’s internal expenses (including all salaries and expenses of its officers
and employees performing legal or accounting duties), (xi) all expenses related
to the “road-show” for any underwritten offering, including all travel, meals
and lodging and (xii) any other fees and disbursements customarily paid by the
issuers of securities. All such expenses are referred to herein as “Registration
Expenses.” The Company shall not be required to pay any underwriting discounts
and commissions and transfer taxes, if any, attributable to the sale of
Registrable Securities.

 

2.4          Company Obligations. The Company will use reasonable best efforts
to effect the registration of the Registrable Securities in accordance with the
terms hereof, and pursuant thereto the Company will:

 

(a)           prepare the required Registration Statement including all exhibits
and financial statements required under the Securities Act to be filed
therewith, and before filing a Registration Statement, Prospectus or any Free
Writing Prospectus, or any amendments or supplements thereto, (x) furnish to the
underwriters, if any, and the Participating Holders, if any, copies of all
documents prepared to be filed, which documents shall be subject to the review
of such underwriters and the Participating Holders and their respective counsel
and (y) except in the case of a registration under Section 2.2, not file any
Registration Statement or Prospectus or amendments or supplements thereto to
which any Participating Holders or the underwriters, if any, shall reasonably
object;

 

(b)           file with the SEC a Registration Statement relating to the
Registrable Securities including all exhibits and financial statements required
by the SEC to be filed therewith, and use commercially reasonable efforts to
cause such Registration Statement to become effective under the Securities Act;

 

(c)           prepare and file with the SEC such pre- and post-effective
amendments to such Registration Statement, supplements to the Prospectus and
such amendments or supplements to any Free Writing Prospectus as may be
(y) reasonably requested by any Participating Holder or (z) necessary to keep
such Registration effective for the period of time required by this Agreement,
and comply with provisions of the applicable securities laws with respect to the
sale or other disposition of all securities covered by such Registration
Statement during such period in accordance with the intended method or methods
of disposition by the sellers thereof set forth in such Registration Statement;

 

(d)           promptly notify the Participating Holders and the managing
underwriter or underwriters, if any, and (if requested) confirm such advice in
writing and provide copies of the relevant documents, as soon as reasonably
practicable after notice thereof is received by the Company (A) when the
applicable Registration Statement or any amendment thereto has been filed or
becomes effective, and when the applicable Prospectus or

 

6

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Free Writing Prospectus or any amendment or supplement thereto has been filed,
(B) of any written comments by the SEC or any request by the SEC for amendments
or supplements to such Registration Statement, Prospectus or Free Writing
Prospectus or for additional information, (C) of the issuance by the SEC of any
stop order suspending the effectiveness of such Registration Statement or any
order by the SEC preventing or suspending the use of any preliminary or final
Prospectus or any Free Writing Prospectus or the initiation or threatening of
any proceedings for such purposes, (D) if, at any time, the representations and
warranties of the Company in any applicable underwriting agreement cease to be
true and correct in all material respects, (E) of the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Registrable Securities for offering or sale in any jurisdiction and (F) of the
receipt by the Company of any notification with respect to the initiation or
threatening of any proceeding for the suspension of the qualification of the
Registrable Securities for offering or sale in any jurisdiction;

 

(e)           promptly notify the Participating Holders and the managing
underwriter or underwriters, if any, when the Company becomes aware of the
happening of any event as a result of which the Registration Statement, the
Prospectus included in such Registration Statement (as then in effect) or any
Free Writing Prospectus contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein (in the
case of such Prospectus, any preliminary Prospectus or any Free Writing
Prospectus, in light of the circumstances under which they were made) not
misleading, when any Free Writing Prospectus includes information that may
conflict with the information contained in the Registration Statement, or, if
for any other reason it shall be necessary during such time period to amend or
supplement such Registration Statement, Prospectus or Free Writing Prospectus in
order to comply with the Securities Act and, in either case as promptly as
reasonably practicable thereafter, prepare and file with the SEC and furnish
without charge to the Participating Holders and the managing underwriter or
underwriters, if any, an amendment or supplement to such Registration Statement,
Prospectus or Free Writing Prospectus which shall correct such misstatement or
omission or effect such compliance;

 

(f)            promptly incorporate in a Prospectus supplement, Free Writing
Prospectus or post-effective amendment to the applicable Registration Statement
such information as the managing underwriter or underwriters and the
Participating Holders agree should be included therein relating to the plan of
distribution with respect to such Registrable Securities, and make all required
filings of such Prospectus supplement, Free Writing Prospectus or post-effective
amendment as soon as reasonably practicable after being notified of the matters
to be incorporated in such Prospectus supplement, Free Writing Prospectus or
post-effective amendment;

 

(g)           furnish to each Participating Holder and each underwriter, if any,
without charge, as many conformed copies as such Participating Holder or
underwriter may reasonably request of the applicable Registration Statement and
any amendment or post-effective amendment thereto, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits (including those incorporated by reference);

 

(h)           deliver to each Participating Holder and each underwriter, if any,
without charge, as many copies of the applicable Prospectus (including each
preliminary Prospectus), any Free Writing Prospectus and any amendment or
supplement thereto as such Participating Holder or underwriter may reasonably
request (it being understood that the Company consents to the use of such
Prospectus, any Free Writing Prospectus and any amendment or supplement thereto
by such Participating Holder and the underwriters, if any, in connection with
the offering and sale of the Registrable Securities thereby) and such other
documents as such Participating Holder or underwriter may reasonably request in
order to facilitate the disposition of the Registrable Securities by such
Participating Holder or underwriter;

 

(i)            on or prior to the date on which the Registration Statement is
declared effective, use its reasonable best efforts to register or qualify, and
cooperate with the Participating Holders, the managing underwriter or
underwriters, if any, and their respective counsel, in connection with the
registration or qualification of such Registrable Securities for offer and sale
under the securities or “Blue Sky” laws of each state and other jurisdiction of
the United States as any Participating Holder or managing underwriter or
underwriters, if any, or their respective

 

7

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counsel reasonably request in writing and do any and all other acts or things
reasonably necessary or advisable to keep such registration or qualification in
effect for such period as required by this Agreement, provided that the Company
shall not be required to qualify generally to do business in any jurisdiction
where it is not then so qualified or to take any action which would subject it
to taxation or general service of process in any such jurisdiction where it is
not then so subject;

 

(j)            cooperate with the Participating Holders and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends, and enable such Registrable Securities to be in
such denominations and registered in such names as the managing underwriters may
request at least two (2) Business Days prior to any sale of Registrable
Securities to the underwriters;

 

(k)           use its reasonable best efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the seller or sellers thereof or the underwriter or underwriters, if
any, to consummate the disposition of such Registrable Securities;

 

(l)            make such representations and warranties to the Participating
Holders and the underwriters or agents, if any, in form, substance and scope as
are customarily made by issuers in secondary underwritten public offerings;

 

(m)          enter into such customary agreements (including underwriting and
indemnification agreements) and take all such other actions as the Purchasers or
the managing underwriter or underwriters, if any, reasonably request in order to
expedite or facilitate the registration and disposition of such Registrable
Securities;

 

(n)           obtain for delivery to the Participating Holders and to the
underwriter or underwriters, if any, an opinion or opinions from counsel for the
Company dated the effective date of the Registration Statement or, in the event
of an underwritten offering, the date of the closing under the underwriting
agreement, in customary form, scope and substance, which opinions shall be
reasonably satisfactory to such Participating Holders or underwriters, as the
case may be, and their respective counsel;

 

(o)           in the case of an underwritten offering, obtain for delivery to
the Company and the managing underwriter or underwriters, with copies to the
Participating Holders, a cold comfort letter from the Company’s independent
certified public accountants in customary form and covering such matters of the
type customarily covered by cold comfort letters as the managing underwriter or
underwriters reasonably request, dated the date of execution of the underwriting
agreement and brought down to the date of the closing under the underwriting
agreement;

 

(p)           cooperate with each Participating Holder and each underwriter, if
any, participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with FINRA
or any other securities regulatory authority;

 

(q)           use its reasonable best efforts to comply with all applicable
securities laws and make available to its security holders, as soon as
reasonably practicable, an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act and the rules and regulations promulgated
thereunder;

 

(r)            provide and cause to be maintained a transfer agent and registrar
for all Registrable Securities covered by the applicable Registration Statement
from and after a date not later than the effective date of such Registration
Statement;

 

8

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(s)            use commercially reasonable efforts to cause all Registrable
Securities covered by the Registration Statement to be listed on each securities
exchange on which any of the Common Stock is then listed or quoted and on each
inter-dealer quotation system on which any of the Common Stock is then quoted;

 

(t)            the Company shall make available, during normal business hours,
for inspection and review by the Purchasers, advisors to and representatives of
the Purchasers (who may or may not be affiliated with the Purchasers and who are
reasonably acceptable to the Company), all financial and other records, all SEC
Reports (as defined in the Purchase Agreement) and other filings with the SEC,
and all other corporate documents and properties of the Company as may be
reasonably necessary for the purpose of such review, and cause the Company’s
officers, directors and employees, within a reasonable time period, to supply
all such information reasonably requested by the Purchasers or any such
representative, advisor or underwriter in connection with such Registration
Statement (including, without limitation, in response to all questions and other
inquiries reasonably made or submitted by any of them), prior to and from time
to time after the filing and effectiveness of the Registration Statement for the
sole purpose of enabling the Purchasers and such representatives, advisors and
underwriters and their respective accountants and attorneys to conduct initial
and ongoing due diligence with respect to the Company and the accuracy of such
Registration Statement; and

 

(u)           with a view to making available to the Purchasers the benefits of
Rule 144 (or its successor rule) and any other rule or regulation of the SEC
that may at any time permit the Purchasers to sell shares of Common Stock to the
public without registration, the Company covenants and agrees to: (i) make and
keep public information available, as those terms are understood and defined in
Rule 144, until the earlier of (A) the date as all of the Registrable Securities
may be sold without restriction by the holders thereof pursuant to Rule 144 or
any other rule of similar effect or (B) such date as all of the Registrable
Securities shall have been resold; (ii) file with the SEC in a timely manner all
reports and other documents required of the Company under the Exchange Act; and
(iii) furnish to each Purchaser upon request, as long as such Purchaser owns any
Registrable Securities, (A) a written statement by the Company that it has
complied with the reporting requirements of the Exchange Act, (B) a copy of the
Company’s most recent Annual Report on Form 10-K or Quarterly Report on
Form 10-Q, and (C) such other information as may be reasonably requested in
order to avail such Purchaser of any rule or regulation of the SEC that permits
the selling of any such Registrable Securities without registration.

 

2.5          Obligations of the Purchasers.

 

(a)           Each Purchaser shall furnish in writing to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it, as
shall be reasonably required to effect the registration of such Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably request. At least five (5) Business Days prior to
the first anticipated filing date of any Registration Statement, the Company
shall notify each Purchaser of the information the Company requires from such
Purchaser if such Purchaser elects to have any of its Registrable Securities
included in the Registration Statement. A Purchaser shall provide such
information to the Company at least two (2) Business Days prior to the first
anticipated filing date of such Registration Statement if such Purchaser elects
to have any of its Registrable Securities included in the Registration
Statement.

 

(b)           Each Purchaser, by its acceptance of the Registrable Securities
agrees to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of a Registration Statement
hereunder, unless such Purchaser has notified the Company in writing of its
election to exclude all of its Registrable Securities from such Registration
Statement.

 

(c)           Each Purchaser agrees that, upon receipt of any notice from the
Company of either (i) the commencement of an Allowed Delay pursuant to
Section 2.1(b)(ii) the happening of an event pursuant to Section 2.4(d) and
Section 2.4(e) hereof, such Purchaser will immediately discontinue disposition
of Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities, until the Purchaser is advised by the Company that such
dispositions may again be made.

 

9

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2.6 Underwriting.

 

(a)           Shelf Registrations.

 

(i)            If the Initiating Shelf Take-Down Holder so requests, an offering
of Registrable Securities shall be in the form of an underwritten offering, and
such Initiating Shelf Take-Down Holder shall have the right to select the
managing underwriter or underwriters to administer the offering. In the case of
an underwritten offering under Section 2.1, the price, underwriting discount and
other financial terms for the Registrable Securities shall be determined by the
Initiating Shelf Take-Down Holder.

 

(ii)           If the managing underwriter or underwriters of a proposed
underwritten offering of the Registrable Securities included in a Shelf
Take-Down advise the Board in writing that, in its or their opinion, the number
of securities requested to be included in such Shelf Take-Down exceeds the
number which can be sold in such offering without being likely to have a
significant adverse effect on the price, timing or distribution of the
securities offered or the market for the securities offered, the securities to
be included in such Shelf Take-Down (i) first, shall be allocated pro rata among
the Participating Holders that have requested to participate in such Shelf
Take-Down based on the relative number of Registrable Securities requested by
each Participating Holder to be included in such Shelf Take-Down and
(ii) second, and only if all the securities referred to in clause (i) have been
included in such Shelf Take-Down, the number of securities that the Company
proposes to include in such Shelf Take-Down that, in the opinion of the managing
underwriter or underwriters, can be sold without having such adverse effect.

 

(iii)          If requested by the underwriters for any underwritten offering
requested by an Initiating Shelf Take-Down Holder under Section 2.1, the Company
shall enter into an underwriting agreement with such underwriters for such
offering, such agreement to be reasonably satisfactory in substance and form to
the Company, the Initiating Shelf Take-Down Holder and the underwriters, and to
contain such representations and warranties by the Company and such other terms
as are generally prevailing in agreements of that type, including customary
indemnities.

 

(b)           Piggyback Registrations.

 

(i) If the Company proposes to register any of its securities under the
Securities Act as contemplated by Section 2.2 and such securities are to be
distributed in an underwritten offering through one or more underwriters, the
Company shall, if requested by any Holders pursuant to Section 2.2, use its
reasonable best efforts to arrange for such underwriters to include on the same
terms and conditions that apply to the other sellers in such registration all
the Registrable Securities to be offered and sold by such Holders among the
securities of the Company to be distributed by such underwriters in such
registration.

 

(ii)           If the managing underwriter or underwriters of any proposed
underwritten offering including Registrable Securities pursuant to Section 2.2
informs the Company and each Participating Holder and the RRA Holder that, in
its or their opinion, the number of securities which the Participating Holders
and the RRA Holder intend to include in such offering exceeds the number which
can be sold in such offering without being likely to have a significant adverse
effect on the price, timing or distribution of the securities offered or the
market for the securities offered, then the securities to be included in such
registration shall be allocated pro rata among the Participating Holders and/or
RRA Holder that have requested to participate in such registration based on the
relative number of Registrable Securities requested by each Participating Holder
and/or RRA Holder, as applicable, to be included in such underwritten offering.

 

(ii)           Notwithstanding anything in this Agreement to the contrary, the
provisions of this Section 2.6(b) 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 holders holding at least sixty percent (60%) of the then
outstanding Piggyback Registrable Securities; provided, however, that if any
such waiver or amendment effected pursuant to this Section 2.6(b)(iii)

 

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materially and adversely affects the rights of the Holders and does not
materially and adversely affect the rights of the RRA Holder in the same manner,
then such waiver or amendment shall require the consent of the holders of a
majority-in-interest of the then outstanding Registrable Securities; provided
further that if any such waiver or amendment effected pursuant to this
Section 2.6(b)(iii) materially and adversely affects the rights of the RRA
Holder and does not materially and adversely affect the rights of the Holders in
the same manner, then such waiver or amendment shall require the consent of the
RRA Holder.

 

(c)           Participation in Underwritten Registrations. Subject to the
provisions of Section 2.6(a)(ii) and Section 2.6(b)(ii) above, no Person may
participate in any underwritten offering hereunder unless such Person (i) agrees
to sell such Person’s securities on the basis provided in any underwriting
arrangements approved by the Persons entitled to approve such arrangements and
(ii) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements and all applicable securities laws. The Participating
Holders shall be parties to such underwriting agreement, which underwriting
agreement shall (i) contain such representations and warranties by, and the
other agreements on the part of, the Company to and for the benefit of such
Participating Holders as are customarily made by issuers to selling stockholders
in secondary underwritten public offerings and (ii) provide that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement also shall be conditions precedent to the obligations of
such Participating Holders. Any such Participating Holder shall not be required
to make any representations or warranties to or agreements with the Company or
the underwriters in connection with such underwriting agreement other than
representations, warranties or agreements regarding such Participating Holder,
such Participating Holder’s title to the Registrable Securities, such
Participating Holder’s authority to sell the Registrable Securities, such
Participating Holder’s intended method of distribution, absence of liens with
respect to the Registrable Securities, enforceability of the applicable
underwriting agreement as against such Participating Holder, receipt of all
consents and approvals with respect to the entry into such underwriting
agreement and the sale of such Registrable Securities and any other
representations required to be made by such Participating Holder under
applicable law, rule or regulation, and the aggregate amount of the liability of
such Participating Holder in connection with such underwriting agreement shall
not exceed such Participating Holder’s net proceeds from such underwritten
offering.

 

(d)           Clear Market. With respect to any underwritten offerings of
Registrable Securities by the Holders, the Company agrees not to, and shall not
be obligated to, effect any public sale or distribution, or to file any
Registration Statement covering any of its equity securities or any securities
convertible into or exchangeable or exercisable for such securities, during the
period not to exceed ten (10) days prior and sixty (60) days following the
effective date of such offering (or such lesser period that the managing
underwriters in any underwritten offering permit). Notwithstanding the
foregoing, the Company may effect the registration of (A) equity securities
and/or options or other rights in respect thereof solely registered on Form S-4
or Form S-8 (or successor form) or (B) shares of equity securities and/or
options or other rights in respect thereof to be offered to directors,
employees, consultants, customers, lenders or vendors of the Company or its
Subsidiaries or in connection with dividend reinvestment plans.

 

2.7          Indemnification.

 

(a)           Indemnification by the Company. The Company will indemnify and
hold harmless each Purchaser and its officers, directors, members, employees and
agents, successors and assigns, and each other person, if any, who controls such
Purchaser within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, any preliminary Prospectus or final
Prospectus, or any amendment or supplement thereof or any omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, in light of the circumstances in
which they were made; (ii) any “Blue Sky” application or other document executed
by the Company specifically for that purpose or based upon written information
furnished by the Company filed in any state or other jurisdiction in order to
qualify any or all of the Registrable Securities under the securities laws
thereof

 

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(any such application, document or information herein called a “Blue Sky
Application”); (iii) the omission or alleged omission to state in a Blue Sky
Application a material fact required to be stated therein or necessary to make
the statements therein not misleading, in light of the circumstances in which
they were made; (iv) any violation by the Company or its agents of any rule or
regulation promulgated under the Securities Act applicable to the Company or its
agents and relating to action or inaction required of the Company in connection
with such registration; or (v) any failure to register or qualify the
Registrable Securities included in any such Registration Statement in any state
where the Company or its agents has affirmatively undertaken or agreed in
writing that the Company will undertake such registration or qualification on a
Purchaser’s behalf and will reimburse such Purchaser, and each such officer,
director or member and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by such Purchaser or any such
controlling person in writing specifically for use in such Registration
Statement or Prospectus.

 

(b)           Indemnification by the Purchasers. Each Purchaser agrees,
severally but not jointly, to indemnify and hold harmless, to the fullest extent
permitted by law, the Company, its directors, officers, employees, stockholders
and each person who controls the Company (within the meaning of the Securities
Act) against any losses, claims, damages, liabilities and expense (including
reasonable attorney fees) resulting from any untrue statement or alleged untrue
statement of a material fact or any omission or alleged omission of a material
fact required to be stated in the Registration Statement or Prospectus or
preliminary Prospectus or amendment or supplement thereto or necessary to make
the statements therein not misleading, in light of the circumstances in which
they were made, to the extent, but only to the extent that such untrue statement
or alleged untrue statement or omission or alleged omission is contained in any
information furnished in writing by such Purchaser to the Company specifically
for inclusion in such Registration Statement or Prospectus or amendment or
supplement thereto. In no event shall the liability of a Purchaser be greater in
amount than the dollar amount of the proceeds (net of all expense paid by such
Purchaser in connection with any claim relating to this Section 2 and the amount
of any damages such Purchaser has otherwise been required to pay by reason of
such untrue statement or omission) received by such Purchaser upon the sale of
the Registrable Securities included in the Registration Statement giving rise to
such indemnification obligation.

 

(c)           Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party (provided, however, that such indemnified
party shall, at the expense of the indemnifying party, be entitled to counsel of
its own choosing to monitor such defense); provided that, subject to the
preceding sentence, any Person entitled to indemnification hereunder shall have
the right to employ separate counsel and to participate in the defense of such
claim, but the fees and expenses of such counsel shall be at the expense of such
Person unless (a) the indemnifying party has agreed to pay such fees or
expenses, or (b) the indemnifying party shall have failed to assume the defense
of such claim and employ counsel reasonably satisfactory to such person or
(c) in the reasonable judgment of any such Person, based upon written advice of
its counsel, a conflict of interest exists between such person and the
indemnifying party with respect to such claims (in which case, if the Person
notifies the indemnifying party in writing that such Person elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such claim on behalf of
such Person); and provided, further, that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations hereunder, except to the extent that such failure to give notice
shall materially adversely affect the indemnifying party in the defense of any
such claim or litigation. It is understood that the indemnifying party shall
not, in connection with any proceeding in the same jurisdiction, be liable for
fees or expenses of more than one separate firm of attorneys at any time for all
such indemnified parties. No indemnifying party will, except with the consent of
the indemnified party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation.

 

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(d)           Contribution. If for any reason the indemnification provided for
in the preceding paragraphs (a) and (b) is unavailable to an indemnified party
or insufficient to hold it harmless, other than as expressly specified therein,
then the indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect the relative fault of the
indemnified party and the indemnifying party, as well as any other relevant
equitable considerations. 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 not guilty of such fraudulent misrepresentation. In
no event shall the contribution obligation of a holder of Registrable Securities
be greater in amount than the dollar amount of the proceeds (net of all expenses
paid by such holder in connection with any claim relating to this Section 2 and
the amount of any damages such holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission) received by it upon the sale of the Registrable Securities giving rise
to such contribution obligation.

 

3.             Miscellaneous.

 

3.1          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.

 

3.2          Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successor and assigns of the parties hereto (other than the rights of
any Holder under Section 2 hereof, which shall not be assignable and shall not
inure to the benefit of any successor or assign of a Holder). The Company may
not assign its rights or obligations hereunder except with the prior written
consent of each Holder. Each Holder may assign their respective rights hereunder
in the manner and to the Persons permitted under the Purchase Agreement, except
as specified above.

 

3.3          Entire Agreement; Amendment. This Agreement and the other
Transaction Documents constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof. Any previous
agreements among the parties relative to the specific subject matter hereof are
superseded by this Agreement. Neither this Agreement nor any provision hereof
may be amended, changed, waived, discharged or terminated other than by a
written instrument signed by the party against who enforcement of any such
amendment, change, waiver, discharge or termination is sought.

 

3.4          Notices. All notices and other communications provided for or
permitted hereunder shall be made as set forth in Section 7.3 of the Purchase
Agreement.

 

3.5          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.

 

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3.6          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.

 

3.7          Counterparts. 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.

 

3.8          Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party upon any breach or
default of any other party under this Agreement shall impair any such right,
power or remedy, nor shall it be construed to be a waiver of any such breach or
default, or any acquiescence therein, or of any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character of any breach or default under this Agreement, or any
waiver of any provisions or conditions of this Agreement must be in writing and
shall be effective only to the extent specifically set forth in writing, and
that all remedies, either under this Agreement, by law or otherwise, shall be
cumulative and not alternative.

 

3.9          Consents. Any permission, consent, or approval of any kind or
character under this Agreement shall be in writing and shall be effective only
to the extent specifically set forth in such writing.

 

3.10        SPECIFIC PERFORMANCE. THE PARTIES HERETO AGREE THAT IRREPARABLE
DAMAGE WOULD OCCUR IN THE EVENT THAT ANY OF THE PROVISIONS OF THIS AGREEMENT
WERE NOT PERFORMED IN ACCORDANCE WITH ITS SPECIFIC INTENT OR WERE OTHERWISE
BREACHED. IT IS ACCORDINGLY AGREED THAT THE PARTIES SHALL BE ENTITLED TO AN
INJUNCTION OR INJUNCTIONS, WITHOUT BOND, TO PREVENT OR CURE BREACHES OF THE
PROVISIONS OF THIS AGREEMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND
PROVISIONS HEREOF, THIS BEING IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY
MAY BE ENTITLED BY LAW OR EQUITY, AND ANY PARTY SUED FOR BREACH OF THIS
AGREEMENT EXPRESSLY WAIVES ANY DEFENSE THAT A REMEDY IN DAMAGES WOULD BE
ADEQUATE.

 

3.11        Construction of Agreement. No provision of this Agreement shall be
construed against either party as the drafter thereof.

 

3.12        Section References. Unless otherwise stated, any reference contained
herein to a Section or subsection refers to the provisions of this Agreement.

 

3.13        Variations of Pronouns. All pronouns and all variations thereof
shall be deemed to refer to the masculine, feminine, or neuter, singular or
plural, as the context in which they are used may require.

 

 

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

 

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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first written above.

 

 

 

GTx, INC.

 

 

 

 

 

By:

 

 

Name:

Marc S. Hanover

 

Title:

President and Chief Operating Officer

 

 

[Signature Page to Registration Rights Agreement]

 

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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first written above.

 

 

 

PURCHASER

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

[Signature Page to Registration Rights Agreement]

 

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EXHIBIT C
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
ISSUER OF THE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE ISSUER 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 AN INVESTORS RIGHT AGREEMENT, DATED AS OF MARCH [·], 2014, COPIES
OF WHICH ARE AVAILABLE WITH THE SECRETARY OF THE ISSUER.

 

GTx, INC.

 

FORM OF COMMON STOCK WARRANT

 

Warrant No. CSW-[·]

Date of Issuance: [March ·, 2014](1)

 

GTx, Inc., a Delaware corporation (the “Company”), hereby certifies that, for
value received, [·], a [·], or its registered assign (the “Holder”), is entitled
to purchase from the Company [·] shares (as adjusted from time to time as
provided in Section 12) 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 an exercise price determined pursuant to
Section 3 (the “Exercise Price”), at any time and from time to time from and
after the date hereof through and including the date that is one (1) year
following the date of issuance set forth above (the “Expiration Date”), and
subject to the following terms and conditions:

 

1.             Purchase Agreement. This Common Stock Warrant (this “Warrant”) is
one of a series of Warrants (collectively, the “Warrants”) issued by the Company
in connection with that certain Securities Purchase Agreement, entered into on
March [·], 2014 (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.

 

3.             Exercise Price. This Warrant may be exercised for a price per
Warrant Share equal to $[·](2), subject to adjustment from time to time pursuant
to Section 12 (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.

 

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(1) To be issued on Closing Date.

(2) (i) the greater of book and market value of one share of the Company’s
Common Stock as of: (1) the date of the signing of the Securities Purchase
Agreement (as defined below) assuming such signing occurs after market close or
(2) the date immediately prior to the date of signing if signing occurs during
market hours.

 

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(a)           No Holder may, directly or indirectly, sell, exchange, assign or
otherwise transfer all or any portion of this Warrant without the prior written
consent of the Company; provided that (i) a Holder that is a natural person may
transfer all or a portion of this Warrant to one or more trusts for the benefit
of such Holder, such Holder’s spouse, a lineal descendant of such Holder or such
Holder’s parents, the spouse of any such descendant or a lineal descendant of
any such spouse and (ii) a Holder that is a Person other than a natural person
may transfer all or a portion of the Warrant to an Affiliate of such Holder.

 

(b)           Subject to the Holder’s appropriate compliance with the
restrictive legend on this Warrant and the transfer restrictions set forth
herein, the Company shall register the transfer of any portion of this Warrant
in the Warrant Register, upon 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. 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. 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.

 

6.             Exercise and Duration of Warrants. This Warrant shall be
exercisable by the registered Holder at any time and from time to time on or
after the date hereof to 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.

 

(a)           To effect conversions hereunder, the Holder shall not be required
to physically surrender this Warrant unless the aggregate number of Warrant
Shares represented by this Warrant is being exercised. 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 applicable Exercise Price multiplied by
the number of Warrant Shares that the Holder intends to purchase hereunder, the
Company shall promptly (but in no event later than five (5) trading days after
the Date of Exercise (as defined below)) issue and deliver, or cause its
transfer agent to issue and deliver, to the Holder a certificate for the Warrant
Shares issuable upon such exercise registered in the name of the Holder or its
designee. A “Date of Exercise” means the date on which the Holder shall have
delivered to the Company: (i) an Exercise Notice, appropriately completed and
duly signed, and (ii) 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.

 

(b)           If by the fifth trading day after a Date of Exercise the Company
fails to deliver the required number of Warrant Shares in the manner required
pursuant to Section 7(a), the Holder will have the right to rescind such
exercise.

 

(c)           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
certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof; provided, however, under no circumstances
shall the Company be required to settle the Warrant by cash payment.

 

2

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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 or any other
contingent purchase rights of persons other than the Holder (taking into account
the adjustments and restrictions of Section 12). 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.          Notice of Certain Corporate Action. In case the Company shall
propose (a) to offer to the holders of its Common Stock rights to subscribe for
or to purchase any shares of Common Stock or shares of stock of any class or any
other securities, rights or options, or (b) to effect any reclassification of
its Common Stock (other than a reclassification involving only the subdivision,
or combination, of outstanding shares of Common Stock), or (c) to effect any
capital reorganization, or (d) to effect any Fundamental Transaction (as defined
below), or (e) to effect the liquidation, dissolution or winding up of the
Company or (f) to offer to the holders generally of its Common Stock the right
to have their shares of Common Stock repurchased or redeemed or otherwise
acquired by the Company, or (g) to take any other action which would require the
adjustment of the Exercise Price and/or the number of Warrant Shares issuable
upon exercise of this Warrant, then in each such case (but without limiting the
provisions of Section 12), the Company shall give to the Holder, a notice of
such proposed action, which shall specify the date on which a record is to be
taken for purposes of such dividend, distribution of offer of rights, or the
date on which such reclassification, reorganization, Fundamental Transaction,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of Common Stock, if any such date is to be
fixed and shall also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action on the Common Stock.
Such notice shall be so given at least ten (10) Business Days prior to the
record date for determining holders of the Common Stock for purposes of
participating in or voting on such action, or at least ten (10) Business Days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Common Stock, whichever shall be the
earlier. Such notice shall specify, in the case of any subscription or
repurchase rights, the date on which the holders of Common Stock shall be
entitled thereto. Such notice shall also state whether the action in question or
the record date is subject to the effectiveness of a registration statement
under the Securities Act or to a favorable vote of security holders, if either
is required, and the adjustment in Exercise Price and/or number of Warrant
Shares issuable upon exercise of this Warrant as a result of such
reorganization, reclassification, Fundamental Transaction or other action, to
the extent then determinable. No such notice shall be given if the Company
reasonably determines that the giving of such notice would require disclosure of
material information which the Company has a bona fide purpose for preserving as
confidential or the disclosure of which would not be in the best interests of
the Company.

 

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12.          Certain Adjustments. 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 12.

 

(a)           Stock Dividends and Splits. If the Company, at any time while this
Warrant is outstanding: (i) pays a stock dividend or otherwise makes a
distribution or distributions on shares of its Common Stock or any other equity
or equity equivalent securities payable in shares of Common Stock (which, for
avoidance of doubt, shall not include any shares of Common Stock issued by the
Company upon exercise of any Warrants), (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 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 or consolidation of the Company
with or into another Person, (B) effects any sale, lease, license, assignment,
transfer, conveyance 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 issuances by reclassification contemplated by
Section 12(a)(iv)), 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 of Persons
whereby such other Person or group acquires more than fifty percent (50%) of the
outstanding shares of Common Stock (not including any shares of Common Stock
held by the other Person or group making or party to, or associated or
affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination), 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, the
Company shall provide to the Holder twenty (20) days advance written notice of
such Fundamental Transaction, and this Warrant shall terminate unless exercised
(if exercisable) prior to the date such Fundamental Transaction.

 

(c)           Notice of Adjustment. Upon any adjustment of the Exercise Price,
and from time to time upon the request of the Holder, the Company shall furnish
to the Holder the Exercise Price resulting from such adjustment or otherwise in
effect and the number of Warrant Shares then available for purchase under this
Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based.

 

13.          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
closing price of one share of Common Stock as reported on the principal trading
market for the Common Stock on the Date of Exercise.

 

14.          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

 

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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.

 

15.          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.

 

16.          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.

 

17.          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 17(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 17(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 17(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

Attn: Principal Financial Officer or Chief Legal Officer

Facsimile: (901) 844-8075

 

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

 

Cooley LLP

3175 Hanover Street

Palo Alto, CA 94304

Attn: Chadwick L. Mills

Facsimile: (650) 849-7400

 

(ii) if to the Holder, to the address, facsimile number or email or street
address appearing on the Warrant Register (which shall initially be the
facsimile number and email 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 17(a).

 

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(b)           Assignment. Subject to the restrictions on transfer described
herein, 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. The Company shall not have the
right directly or indirectly to assign or transfer this Warrant without the
prior written consent of the Holder, which may be withheld in the Holder’s sole
discretion, or as part 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. This Warrant may be amended only in writing
signed by the Company and the Holder, and any amendment so effected shall amend
each Warrant issued pursuant to the Purchase Agreement and be binding upon each
holder of such Warrants (provided, however, that any such amendment that
adversely affects any holder or class of holders of such Warrants in a manner
that does not apply uniformly to all holders of such Warrants, as applicable,
shall require the written consent of such adversely affected holders or class).
Any provision of this Warrant may be waived, but only if in writing by the party
against whom enforcement of any such waiver is sought. 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.

 

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

 

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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:

President and Chief Operating 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. CSW-[·], originally issued on [·],
2014 (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: $                    

Manner of Exercise:

 

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†:

 

 

 

 

 

 

 

 

 

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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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