Exhibit 10.1
STOCK REDEMPTION AGREEMENT
     This Stock Redemption Agreement (“Agreement”) is entered into as of March
22, 2010 between RXi Pharmaceuticals Corporation, a corporation incorporated
under the laws of Delaware (“Corporation”) and CytRx Corporation, a corporation
incorporated under the laws of Delaware (“Stockholder”).
Recitals
     A. Stockholder is the owner of a portion of the issued and outstanding
shares of Common Stock, $0.0001 par value per share, of the Corporation (the
“Common Stock”).
     B. Stockholder desires to sell to Corporation and Corporation desires to
redeem from Stockholder the number of shares of Common Stock determined as
described herein.
     C. The execution, delivery and performance of this Agreement by the parties
hereto is a condition precedent to Stockholder’s agreement to waive its
preemptive rights in connection with the Corporation’s issuance and sale of
Common Stock and warrants to purchase shares of Common Stock (the “Warrants”)
pursuant to the Securities Purchase Agreement (the “Securities Purchase
Agreement”) dated the date hereof among the Corporation and certain investors
(the “Offering”) and the Placement Agent Agreement (the “Placement Agent
Agreement”) dated the date hereof among the Corporation and Rodman & Renshaw,
LLC (“Rodman”).
Agreement
     In consideration of the representations, warranties, covenants, and mutual
promises contained in this Agreement, the parties agree as follows:
Section 1
Purchase of Shares
     1.1 Purchase. On the Initial Closing Date (defined below), Stockholder
agrees to sell and transfer to Corporation, and Corporation shall purchase and
redeem from Stockholder a number of shares of Common Stock equal to 25% of the
number of shares of Common Stock sold by the Corporation in the closing of the
Offering, rounded down to the nearest whole share (the “Initial Redeemed
Shares”). On each Subsequent Closing Date (defined below), Stockholder agrees to
sell and transfer to Corporation, and Corporation shall redeem from Stockholder
25% of the shares of Common Stock issued by Corporation upon the exercise of a
Warrant, rounded down to the nearest whole share or such lesser number of shares
of Common Stock as are, on such Closing Date, owned by Stockholder (such shares
redeemed on each Subsequent Closing Date, “Subsequent Redeemed Shares” and,
together with the Initial Redeemed Shares, the “Shares”). Nothing in this
Agreement shall oblige Stockholder to continue to own or to acquire any shares
of Common Stock at any time, or to sell or deliver any shares of Common Stock to
Corporation at any Warrant Exercise Data as of which Stockholder

 

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owns no shares of Common Stock, and nothing in this Agreement shall oblige
Corporation to purchase from Stockholder any shares of Common Stock acquired by
Stockholder after the date hereof. The obligation of Corporation to purchase and
of Stockholder to sell shares of Common Stock pursuant to this Agreement shall
terminate on the date that Stockholder no longer owns any shares of Common Stock
that it owns on the date hereof.
     1.2 Conveyance of Title. Stockholder agrees to convey title to
Stockholder’s redeemed Shares by the delivery of the stock certificates therefor
at each Closing (defined below) duly endorsed for transfer to Corporation or
accompanied by duly executed stock powers endorsed in blank.
Section 2
Consideration to be Paid to Stockholder
     2.1 Purchase Price for Shares. The purchase price per Share to be paid to
Stockholder at the Initial Closing is the Per Share “Proceeds, before expenses,
to us” as shown on the Corporation’s prospectus supplement related to the
Offering, as filed with the Securities and Exchange Commission (such price per
Share multiplied by the number of Initial Redeemed Shares is hereinafter
referred to as the “Initial Redemption Proceeds”). The purchase price per Share
to be paid to Stockholder at each Subsequent Closing is the per share exercise
price of the Warrants (such per share price multiplied by the number of
Subsequent Redeemed Shares at each Subsequent Closing is hereinafter referred to
as the “Subsequent Redemption Proceeds”).
     2.2 Payment of Purchase Price. At each Closing (as defined below),
Corporation shall pay to Stockholder the Initial Redemption Proceeds or the
Subsequent Redemption Proceeds due upon such Closing, as applicable, by wire
transfer of immediately available federal funds.
Section 3
Representations and Warranties of Stockholder
     Stockholder represents and warrants to Corporation as follows as of each
Closing Date:
     3.1 Ownership. Stockholder is the record and beneficial owner and holder of
the Shares, free and clear of all security interests, liens, claims, proxies,
options, charges or pledges of any kind created by Stockholder. The sale and
delivery of the shares of the Shares to the Corporation pursuant to the terms
hereof will vest in the holders thereof legal and valid title to such Shares,
free and clear of any security interests, liens, claims, proxies, options,
charges or pledges of any kind.
     3.2 Authorization. Stockholder represents that it is duly formed, validly
existing and in good standing under the laws of its jurisdiction of organization
or formation, and has all corporate, limited liability company, partnership or
trust (as the case may be) power and

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authority to enter into this Agreement and instruments referred to herein to
which it is a party and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement, and the
consummation by Stockholder of the transactions contemplated hereby, have been
duly authorized by all necessary action on the part of Stockholder. This
Agreement has been duly executed and delivered by Stockholder and such agreement
constitutes a valid and binding obligation of Stockholder enforceable against it
in accordance with its terms.
     3.3 Consent of Third Parties; Violations. Neither the execution, delivery
or performance of this Agreement by Stockholder, nor the consummation by it of
the obligations and transactions contemplated hereby requires any consent of,
authorization by, exemption from, filing with or notice to any governmental
entity or any other entity or person, other than filings required to be made
with the Securities and Exchange Commission in connection with the execution of
this Agreement and each Closing. Neither the execution and delivery of this
Agreement by Stockholder, the performance by Stockholder of its obligations
hereunder nor the consummation by Stockholder of the transactions contemplated
hereby will (i) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default under, or conflict with any
provisions of the organizational documents of Stockholder or (ii) violate, or
require any consent, approval, or notice under any provision of any judgment,
order or decree or any federal, state, local or foreign statute, law, ordinance,
rule, regulation, order, judgment, decree or legal requirement applicable to
Stockholder.
     3.4 Sophistication; Release. Stockholder, by reason of the business and
financial experience of its management, has the capacity to protect its own
interests in connection with the transactions contemplated by this Agreement and
has had the opportunity to consult counsel or other advisors with respect
thereto. Stockholder is not relying on any representation or warranty of the
Corporation in making its decision to enter into this Agreement or to sell the
Shares. Stockholder is experienced, sophisticated and knowledgeable in trading
securities of public companies and understands the disadvantages to which
Stockholder is subject on account of the disparity of information as between the
Corporation and Stockholder. Stockholder has had the opportunity to
independently investigate and evaluate the value of the Shares and the financial
condition and affairs of the Corporation without reliance upon the Corporation.
Based upon its independent analysis, Stockholder has reached its own business
decision to enter into the transactions contemplated by this Agreement.
Stockholder expressly releases the Corporation, its affiliates and its
shareholders from any and all liabilities arising from any such person’s failure
to disclose, or Stockholder’s inability to review, any such information and
Stockholder agrees to make no claim against the Corporation, its affiliates or
its shareholders in respect thereof.
     3.5 Brokers. There is no broker, investment banker, financial advisor,
finder or other person which has been retained by or is authorized to act on
behalf of Stockholder who might be entitled to any fee or commission for which
the Corporation will be liable in connection with the execution of this
Agreement and the consummation of the transactions contemplated hereby.

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Section 4
Representations and Warranties of Corporation
     Corporation represents and warrants to Stockholder as follows:
     4.1 Corporate Status. Corporation is duly organized, validly existing, and
in good standing under the laws of the state of Delaware.
     4.2 Authorization. This Agreement, the purchase of the Shares hereunder,
the payment of the Initial Redemption Proceeds and the Subsequent Redemption
Proceeds, as applicable, due on such Closing Date and the consummation of the
other transactions to be performed hereunder by Corporation have been approved
by all necessary corporate action on the part of the Corporation, including
approval by the Board of Directors of Corporation and all actions required to be
performed by Corporation by any applicable law or otherwise with respect to such
transactions have been appropriately authorized and accomplished.
     4.3 Consent of Third Parties. Neither the execution, delivery or
performance of this Agreement by Corporation, nor the consummation by it of the
obligations and transactions contemplated hereby requires any consent of,
authorization by, exemption from, filing with or notice to any governmental
entity or any other entity or person, other than filings required to be made
with the Securities and Exchange Commission in connection with the execution of
this Agreement and each Closing. Neither the execution and delivery of this
Agreement by Corporation, the performance by Corporation of its obligations
hereunder nor the consummation by Corporation of the transactions contemplated
hereby will (i) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default under, or conflict with any
provisions of the organizational documents of Corporation or (ii) violate, or
require any consent, approval, or notice under any provision of any judgment,
order or decree or any federal, state, local or foreign statute, law, ordinance,
rule, regulation, order, judgment, decree or legal requirement applicable to
Corporation.
Section 5
Covenants of Stockholder
     Unless Corporation waives such performance in writing, Stockholder
covenants as follows:
     5.1 Conveyance of Title to Shares At each Closing, Stockholder will convey
title to the Shares being sold and transferred at such Closing to Corporation
free and clear of any security interests, liens, claims, proxies, options,
charges or pledges of any kind.
     5.2 Professional Fees. All professional fees including, without limitation,
all attorney and accountant fees, incurred by Stockholder as a result of the
negotiation and preparation of this Agreement and the consummation of the
transactions contemplated hereby will be paid by Stockholder.

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Section 6
Conditions Precedent to Obligations of Corporation
     The obligations of Corporation to be performed hereunder are subject to the
satisfaction (or waiver by Corporation) on or before each Closing of each of the
following conditions:
     6.1 Securities Purchase Agreement. The transactions contemplated by the
Securities Purchase Agreement and Placement Agent Agreement will have been
consummated.
     6.2 Delivery of Redeemed Shares. Stockholder shall have delivered, or
caused to be delivered, to the Corporation the certificates for the Shares being
sold at transferred at such Closing duly endorsed for transfer to Corporation or
accompanied by duly executed stock powers endorsed in blank.
     6.3 Representations and Warranties. The representations and warranties of
Stockholder contained in this Agreement shall be true and correct in all
material respects on and as of each Closing with the same effect as though such
representations and warranties had been made on and as of such Closing.
Section 7
Conditions to Obligations of Stockholder
     The obligations of Stockholder to be performed hereunder are subject to the
satisfaction (or waiver by Stockholder) on or before each Closing of each of the
following conditions:
     7.1 Payment of Purchase Price. Corporation shall have paid the Closing
Amount due at such Closing in the amount and manner specified herein.
Section 8
Closing
     8.1 Time and Place The closing of the redemption of the Initial Redeemed
Shares hereunder (“Initial Closing”) will take place on the first business day
following the closing of the transactions contemplated by the Securities
Purchase Agreement (the “Initial Closing Date”). Each closing of the redemption
of Subsequent Redeemed Shares hereunder (each a “Subsequent Closing”, the
Initial Closing and each Subsequent Closing, each a “Closing”) shall take place
on the first business day following an exercise of a Warrant, or as promptly
thereafter as practicable (the “Subsequent Closing Date”, the Initial Closing
Date and each Subsequent Closing Date, each a “Closing Date”).

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     8.2 Obligations of Stockholder. At each Closing, Stockholder will deliver,
or cause to be delivered, to Corporation the certificates for the Shares to be
redeemed at such Closing duly endorsed for transfer to Corporation or
accompanied by duly executed stock powers endorsed in blank.
     8.3 Obligations of Corporation. At each Closing, Corporation will pay the
Initial Redemption Proceeds or the Subsequent Redemption Proceeds, as
applicable, due at such closing in the manner provided herein. At each Closing,
Corporation will also instruct its transfer agent to promptly issue a new
certificate to Stockholder for the balance of the shares included on the
certificate delivered to Corporation which have not been transferred as part of
such Closing.
     8.4 Additional Actions. Each of the parties, individually, or in their
corporate capacities, hereby agrees to execute and deliver all such additional
documents and take all actions necessary or appropriate to consummate any and
all of the transactions contemplated hereby.
Section 9
Miscellaneous Provisions
     10.1 Notices. Any notices required or permitted hereby will be deemed given
when sent by one party to the other, in writing by registered or certified U.S.
mail, postage prepaid, which in the case of Stockholder may be addressed to
Stockholder at the address set forth in Corporation’s records and in the case of
Corporation, as follows:

         
 
  Corporation:   RXi Pharmaceutical Corporation
 
      60 Prescott Street
 
      Worcester, MA 01605
 
      Attn: President
 
       
 
  With a copy (which will
not constitute notice) to:     Ropes & Gray LLP
 
      One International Place
 
      Boston, MA 02110-2624
 
      Attn: Marc Rubenstein
 
      Facsimile: (617) 951-7050

     The above addresses may be changed from time to time by giving notice
thereof in the manner provided herein.
     10.2 Successors and Assigns. None of the parties may assign their rights or
delegate their duties hereunder. This Agreement will be binding upon and inure
to the benefit of the heirs, executors, administrators, and successors of the
parties hereto.

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     10.3 Integrated Agreement. This Agreement constitutes the complete and
exclusive agreement of the parties. The terms of this Agreement may not be
modified except in a writing signed by all of the parties.
     10.4 Governing Law. The rights and obligations of the parties hereunder and
the interpretation of this Agreement are governed by the laws of the
Commonwealth of Massachusetts (other than those relating to conflicts of laws).
All disputes arising under this Agreement will be resolved by the court having
proper jurisdiction in the Commonwealth of Massachusetts. The parties consent to
submit themselves to the jurisdiction of such courts and agree that service of
process on them in any such dispute may be effected by the means by which
notices are to be given to them under this Agreement.
     10.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which is deemed to be an original, and all of which taken
together constitute one and the same instrument.
     10.6 Waivers. Waiver of the benefit of any provision hereof must be in
writing to be effective. The waiver by any party of a breach of any provision of
this Agreement may not be construed as a waiver of any subsequent breach. No
action taken pursuant to this Agreement, including without limitation, any
investigation by or on behalf of any party, constitutes a waiver by the party
taking the action of compliance with any representations, warranties, covenants,
or other obligations contained herein.
     10.7 Interpretation. Except where otherwise required by the context, words
of any gender used herein will be deemed to include any and all genders and the
singular and plural are interchangeable.
     10.9 Joint Preparation. This Agreement was prepared jointly by the parties
and any uncertainty or ambiguity existing herein may not be interpreted against
either party.
     10.10 Termination. This Agreement may be terminated by either party hereto
upon the termination prior to the Initial Closing of the Securities Purchase
Agreement by delivery of written notice thereof to the non-terminating party.
Upon any such termination, this Agreement shall thereafter be null and void and
cease to have any force or effect whatsoever, and none of the parties hereto
shall have any liability to any other party hereto.

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     To evidence their consent to this Agreement, the parties executed this
instrument on the dates set opposite their signatures below.
Corporation:

            RXi Pharmaceutical Corporation
      By:   /s/ Noah D. Beerman       Name:   Noah D. Beerman      Title:  
Chief Executive Officer     

Stockholder:

            CytRx Corporation
      By:   /s/ Steven A. Kriegsman       Name:   Steven A. Kriegsman     
Title:   President and Chief Executive Officer