exv10w25



 





Exhibit 10.25




EXECUTION COPY




RXI PHARMACEUTICALS CORPORATION




SCIENTIFIC ADVISORY BOARD AGREEMENT




     This
Scientific Advisory Board Agreement (the
“Agreement”) dated as of February 26, 2007, is made by Tariq M. Rana, Ph.D. (the “SAB Member”) and RXi Pharmaceuticals
Corporation, a Delaware corporation (“RXi” and together with the SAB Member, the
“Parties”). The SAB Member is a faculty member at the University of Massachusetts.



AGREEMENT




     1. General.



          (A) Effective Date. Subject to the terms and conditions of this Agreement, this Agreement
will become effective upon the completion of all the following events:





	 	(1)	 	the execution of this Agreement by the Parties;
	 
	 	(2)	 	the approval of this Agreement by the Principal Institution (defined
below);
	 
	 	(3)	 	the execution of Schedule A hereto by all parties thereto;
	 
	 	(4)	 	the transfer to RXi of substantially all of the
RNAi assets owned or controlled by CytRx Corporation (“CytRx”); and
	 
	 	(5)	 	the closing of an equity financing of RXi or
its successor in an aggregate amount of not less than $15 million
dollars or such lesser dollar amount as RXi accepts as an initial
investment from investors (including CytRx acting as an Investor) (the
“Equity Funding”).




The date wherein all of these events are completed (the “Effective Date”) will be indicated
below the signature of the SAB Member on the signature page of this Agreement. If the Effective
Date has not occurred by June 30, 2007, then this Agreement and its terms will be null and void
unless the Parties mutually agree otherwise.




          (B) Services. As of the Effective Date, RXi shall retain the SAB Member, and the SAB Member
agrees to serve, as a member of RXi’s Scientific Advisory Board (“SAB”) and to consult with
RXi in the Field (as hereinafter defined). The SAB Member agrees to provide to RXi such services
in the Field as are customarily performed by a member of a scientific advisory board to a company
such as RXi (the “Services”). The SAB Member is being engaged by RXi as a consultant for
the exchange of ideas only and shall not direct or conduct research for or on behalf of RXi. The
Services will include, without limitation:





	 	•	 	Consulting with RXi’s respective management within the SAB Member’s professional
area of expertise from time to time as reasonably requested by RXi;




 









 












	 	•	 	Exchanging strategic and business development ideas with RXi;
	 
	 	•	 	Attending scientific, medical or business meetings with RXi’s management, such as
United States Food & Drug Administration meetings, meetings with strategic or potential
strategic partners and other meetings relevant to SAB Member’s area of expertise; and
	 
	 	•	 	Attending meetings of the SAB as provided herein.





     For purposes of this Agreement, the term “Field” means the use of RNAi technology in,
or the application of RNAi technology to, the discovery or development of therapeutic products for
humans or animals, and/or the use of RNAi as a component of therapeutic products for humans or
animals. Notwithstanding anything else herein to the contrary, the term “Field” is specifically
understood to not include the use of RNAi technology in, or the application of RNAi
technology to, the discovery and development of reagents, diagnostic products, agricultural
products, or products or services developed for or offered to the research tools and products
market, or the use of RNAi as a component of reagents, diagnostic products, agricultural products,
or products or services developed for or offered to the research tools and products market. The
Services shall not include those services prohibited by the Principal Institution, including as set
forth in “The University of Massachusetts Uniform Consulting Agreement Provisions” attached hereto
as Exhibit A and incorporated herein (the “UMass Provisions”) or any Affiliated Institution
(as defined in Section 2 hereof). The SAB Member is agreeing to provide the Services under this
Agreement in consideration of the compensation provided in Section 3 hereof.



     2. Performance of Services. As of the Effective Date, the SAB Member agrees to make
himself available to render the Services, at such time or times and location or locations as may be
mutually agreed, from time to time at the request of RXi and subject to the UMass Provisions. The
SAB Member agrees not to perform any Services for RXi on the premises of the University of
Massachusetts Medical School (which is referred to as the “Principal Institution”), any
academic institution or any hospital with which he is or may become affiliated (each such Principal
Institution, academic institution and hospital an “Affiliated Institution”) or with the
respective facilities or funds of any such Affiliated Institution which could result in claims by
such Affiliated Institution of rights in any Inventions (as defined in Section 8 hereof), without
the express prior agreement of RXi and the Affiliated Institution, as appropriate. Unless covered
by an appropriate agreement between any third party (other than an Affiliated Institution) and RXi,
the SAB Member shall not knowingly engage in any activities or use any facilities in the course of
providing Services which could result in claims of ownership to any Inventions being made by such
third party. The SAB Member agrees to devote his reasonable and diligent efforts to the
performance of the Services. The SAB Member agrees to devote up to 20 days per year to providing
the Services, including by attending at least 8 SAB meetings per year.



     3. Compensation.



          (A) Up-Front Cash Payment and Grant of Option. RXi will compensate the SAB Member for serving
as a member of the SAB and for providing the Services to RXi as follows, with such compensation to
be the full consideration for the Services:




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(1) Commencing on the Effective Date, RXi shall pay the SAB Member a total
monthly payment of $5,000 for each month during the Term, payable monthly in
arrears as full payment for the cash portion of the SAB Member’s
compensation.




(2) RXi or, if applicable, its successor entity (the “Granting
Party”), shall, at the first regularly scheduled meeting of the Granting
Party following the Effective Date grant the SAB Member a nonqualified stock
option (the “Option”) under the standard option plan of the Granting
Party (the “Option Plan”) to purchase a number of shares of common
stock of RXi equal to 1/140th of the number of shares of common stock of RXi
held by CytRx immediately prior to the Equity Funding (the “Option
Shares”). If the value of the Granting Party’s common stock is not then
Publicly Available (as defined below), at the first regularly scheduled
Board meeting of the Granting Party following each of the first, second and
third anniversaries of the Effective Date, and otherwise on the first,
second and third anniversaries of the Effective Date, the Granting Party
will grant the SAB Member an additional Option to purchase the same number
of Option Shares as previously granted at the first regularly scheduled
Board meeting following the Effective Date. The Option granted at the first
Board meeting following the Effective Date shall have a per share exercise
price equal to the per share price paid for RXi stock in the Equity Funding.
Each additional Option granted pursuant to this Section shall have a per
share exercise price equal to the fair market value of the Granting Party’s
common stock on the respective date of each grant. If the Granting Party’s
common stock is Publicly Available on the date of such grant, the fair
market value shall be equal to the closing price of such stock on such
public market the date of such grant; if the Granting Party’s common stock
is not Publicly Available on the date of such grant, the fair market value
shall be determined in good faith by the Board of Directors of the Granting
Party. The Options shall be fully vested on the date of grant, shall have a
term of ten years, and shall otherwise be in the form of the standard
Nonqualified Stock Option Agreement used by the Granting Party in its Option
Plan. Notwithstanding any language in the standard Nonqualified Stock
Option Agreement or any other Granting Party document or agreement to the
contrary, the Options granted to the SAB Member hereunder shall not be
subject to lapse for any reason prior to the end of their ten year term.
The Granting Party covenants and agrees that it will file an effective Form
S-8 registration statement covering the Options and the Options Shares as
promptly as practicable after the Granting Party becomes eligible to file
such Form, such that from and after the date of filing the Option Shares
shall be freely tradable immediately upon any exercise of the Options. The
Options may be exercised pursuant to a cashless exercise, but only if the
SAB Member is not able at the time to obtain the cash proceeds for the
exercise price in a broker’s transaction (with the Granting Party bearing
any commission expenses charged by the broker in connection with selling
sufficient shares to generate the cash



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proceeds for the exercise price). For purposes of this Agreement, the term
“Publicly Available” shall mean (i) the common stock of the Granting Company
is listed on a national securities exchange or admitted to unlisted trading
privileges on such exchange or (ii) the common stock is not so listed or
admitted to unlisted trading privileges, but is traded on the Nasdaq
SmallCap Market or the OTC Bulletin Board.



          (B) Equity Ownership Limit. To RXi’s best knowledge, after reasonable inquiry, the stock
options set forth herein, when added to all other stock, stock options, rights or other equity or
equity-based securities (collectively, “Securities”) issued or issuable by RXi to the SAB
Member (either directly or indirectly), constitute not more than 5.0% of RXi’s presently issued and
outstanding common stock, as diluted by assuming full exercise of any options and other rights held
by the SAB Member. Indirect holdings for this purpose include without limitation (i) any
Securities issued or issuable by RXi to members of the SAB Member’s immediate family and (ii) any
Securities issued or issuable by RXi to the SAB Member, or Securities allocated or allocable to the
SAB Member under the University of Massachusetts’ inventorship policies, as royalties under a
license by RXi of technology of which the SAB Member is an inventor.




          (C) Expenses. RXi also shall promptly reimburse the SAB Member for reasonable out-of-pocket
expenses, including, without limitation, travel expenses incurred by him in the performance of the
Services (including attendance at all SAB meetings), following RXi’s receipt of a request for
reimbursement from the SAB Member. The SAB Member shall promptly provide RXi with documentation
supporting all such expenses.




     4. Principal Institution. RXi recognizes that the activities of the SAB Member are or
will be subject to the rules and regulations of the Principal Institution and any other Affiliated
Institution, now or in the future, and RXi agrees that SAB Member shall be under no obligation to
perform Services if such performance would conflict with such rules and regulations, or constitute
a conflict of interest under the relevant policies of the Affiliated Institution. The SAB Member
has no reason to believe that the SAB Member’s performance of any of the services contemplated by
this Agreement will conflict with the applicable rules or policies of any Affiliated Institution,
each as presently in effect. In the event such rules and regulations shall, in RXi’s reasonable
opinion or the reasonable opinion of the SAB Member, substantially interfere with the performance
of Services by the SAB Member, RXi or the SAB Member may terminate this Agreement upon 30 days
notice to the other parties. Any such termination by RXi shall not be considered a termination for
Cause, unless the Affiliated Institution’s rules or policies that are asserted by RXi or the SAB
Member to be in conflict with the performance of the Services are rules or policies that are not
generally applied by that Affiliated Institution to other academic researchers at that institution.
The SAB Member shall provide copies to RXi of all status reports he delivers and other material
correspondences he has with any Affiliated Institution concerning this Agreement or the Services
within three (3) business days of his delivery or receipt of such report or correspondence,
provided that the policies of any Affiliated Institution permit him to do so, and provided further
that RXi agrees to hold any such report or correspondence in confidence.



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     5. Term. The SAB Member’s performance of Services shall commence on the Effective
Date and shall continue for a period of four (4) years thereafter (such period, including any
extension of such period, the “Term”), unless either the SAB Member or RXi terminate this
Agreement pursuant to Sections 4 or 6 hereof, or unless this Agreement is extended by the mutual
written agreement of the SAB Member and RXi.



     6. Termination; Effect of Termination.



          (A) Termination by RXi for Cause. RXi may terminate this Agreement (in addition to any other
available remedy) at any time for Cause. The term “Cause” shall mean the SAB Member’s
material failure to perform his duties under this Agreement which goes uncured for more than 15
days following written notice from RXi, the SAB Member’s conviction of or plea of no contest to any
felony, or the SAB Member’s act or failure to act that materially and adversely affects the
business of RXi. If RXi terminates for Cause, the SAB Member will receive no further Options under
this Agreement.




          (B) Termination by SAB Member for Good Reason. The SAB Member may terminate this Agreement
(in addition to any other available remedy) at any time for Good Reason. The term “Good
Reason” shall mean (i) RXi’s breach of any of its material obligations under this Agreement in
any material respect (including without limitation, RXi’s payment obligations and RXi’s obligations
with respect to the Options and the Option Shares) if such breach is not cured within 15 days (10
days in the case of a breach of a payment obligation) after receipt by such party of written notice
thereof, or (ii) the occurrence any of the following events upon not less than 15 days prior
written notice to RXi at any time after the occurrence of such events, but in no event later than
60 days after written notice from RXi to the SAB Member of the occurrence of any of such events:





	 	•	 	a decree, judgment, or order by a court of competent jurisdiction shall have been
entered adjudging RXi as bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization of RXi under any bankruptcy or similar law, and such
decree of order shall have continued undischarged and unstayed for a period of 60 days;
or a decree or order of a court of competent jurisdiction ordering the appointment of a
receiver, liquidator, trustee, or assignee in bankruptcy or insolvency of RXi, or for
the winding up or liquidation of the affairs of RXi, shall have been entered, and such
decree, judgment, or order shall have remained in force undischarged and unstayed for a
period of 60 days;
	 
	 	•	 	RXi shall institute proceedings to be adjudicated a voluntary bankrupt, or shall
consent to the filing of a bankruptcy proceeding against it, or shall file a petition
or answer or consent seeking reorganization under any bankruptcy or similar law or
similar statute, or shall consent to the filing of any such petition, or shall consent
to the appointment of a custodian, receiver, liquidator, trustee, or assignee in
bankruptcy or insolvency of it or any of its assets or property, or shall make a
general assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due; or




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	 	•	 	RXi and its affiliates shall discontinue or suspend indefinitely substantially all
research and development efforts in the Field.




If the SAB Member terminates for Good Reason, the Granting Party shall remain obligated to grant
all Options under this Agreement required pursuant to Section 3(A)(2) hereof at the times and with
the terms specified hereunder.




          (C) Termination by RXi without Cause; termination by SAB Member without Good Reason. RXi or
the SAB Member may terminate this Agreement at any time without cause and without liability to any
other party upon at least 90 days prior written notice to RXi or the SAB Member, as the case may
be. If RXi terminates this Agreement without Cause, the Granting Party shall remain obligated to
grant all Options under this Agreement required pursuant to Section 3(A)(2) hereof at the times and
under the terms specified hereunder. If the SAB Member terminates this Agreement without Good
Reason, he will receive no further Options under this Agreement; provided that, if the SAB Member
terminates this Agreement pursuant to this Section following the first, second or third anniversary
of the Effective Date but prior to the time that RXi has granted the SAB Member the Option with
respect to such anniversary, then RXi shall remain obligated to grant the Option with respect to
such anniversary only.




          (D) Termination due to Death or Disability. This Agreement shall automatically terminate upon
the death of the SAB Member, or upon notice from RXi or the SAB Member following the
“Disability” of the SAB Member. For purposes of this Agreement, the SAB Member shall be
considered “to have suffered a Disability” if: (i) he is incapacitated or disabled by accident,
sickness or otherwise so as to render him mentally or physically incapable of performing a
substantial part of the Services, with or without reasonable accommodation, required to be
performed by him under this Agreement for a period of at least 90 consecutive days, or for 90 days
(whether or not consecutive) during any six (6) month period. A termination by death or Disability
shall not be considered a termination for Cause. Upon the SAB Member’s death or Disability, the
Granting Party shall remain obligated to grant all Options under this Agreement required pursuant
to Section 3(A)(2) hereof at the times and with the terms specified hereunder; provided that, in
the event of the death of the SAB Member, the Granting Party shall be entitled to rely on
instructions of the executor of the SAB Member’s estate, or any other party reasonably determined
by the Granting Party based on the advice of counsel to be the appropriate person to provide
instructions, with respect to the party to receive such grant and all other matters in connection
with such grant, and provided further, that the Granting Party’s obligation to make such grants
following the death of the SAB Member shall be subject to compliance with federal and state
securities laws.




          (E) Termination Pursuant to Section 4. Either party may terminate this Agreement at any time
subject to and in accordance with the provisions of Section 4. Upon the termination of this
Agreement pursuant to Section 4 (other than a termination by RXi that is treated under Section 4 as
a termination for Cause or a termination by the SAB Member other than for Good Reason), the
Granting Party shall remain obligated to grant all Options under this Agreement required pursuant
to Section 3(A)(2) hereof at the times and under the terms specified hereunder.




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          (F) Survival of Certain Provisions. No termination of this Agreement shall relieve the SAB
Member or RXi of any obligations hereunder which by their terms are intended to survive the
termination of the SAB Member’s association with RXi, including, but not limited to, the
obligations of Sections 3 (as to only those provisions that are specifically described as being
applicable after the Term), 8, 9, 10, 11, 12, 15, 18, 19, and 22 through 24 hereof.




          (G) Return of RXi Property. Upon termination of this Agreement for any reason, the SAB Member
shall promptly deliver to RXi any and all property of RXi or their customers, licensees, licensors,
or affiliates provided to SAB Member pursuant to this Agreement which may be in his possession or
control, including without limitation, products, memoranda, notes, diskettes, records, reports,
laboratory notebooks, or other documents or photocopies of the same and shall destroy any
Confidential Information (as defined in Section 9 hereof) in tangible form.




          (H) Rights of Principal Institution. The termination of this Agreement shall not affect RXi’s
obligations to recognize the priority of the University of Massachusetts intellectual property
rights under the third paragraph of Section 8.




     7. Independent Contractor. It is understood and agreed that the SAB Member is an
independent contractor and that neither this Agreement nor the Services to be rendered hereunder
shall for any purpose whatsoever or in any way or manner create any employer-employee relationship
between the parties. The SAB Member shall not be entitled to any fringe benefits generally
provided to employees of RXi and RXi shall not be required to maintain workers’ compensation
coverage for the SAB Member.



     8. Inventions. The SAB Member shall promptly disclose to RXi, and, subject to the
terms of the third paragraph of this Section 8, hereby assigns and agrees to assign to RXi (or as
otherwise directed by RXi), his full right, title and interest, if any, to all Inventions (as
defined below). The SAB Member agrees to cooperate fully with RXi, their attorneys and agents, in
the preparation and filing of all papers and other documents as may be required to perfect RXi’s
rights in and to any of such Inventions, including, but not limited to, execution of any and all
applications for domestic and foreign patents, copyrights or other proprietary rights and the
performance of such other acts (including, among others, the execution and delivery of instruments
of further assurance or confirmation) requested by RXi to assign the Inventions to RXi and to
permit RXi to file, obtain and enforce any patents, copyrights or other proprietary rights in the
Inventions, all at RXi’s sole cost and expense. The SAB Member hereby designates RXi as his agent,
and grants to RXi a power of attorney with full power of substitution, which power of attorney
shall be deemed coupled with an interest, for the purpose of effecting any such assignment
hereunder from the SAB Member to RXi in the event the SAB Member should fail or refuse to sign and
deliver any document in connection with perfecting the foregoing rights of RXi within 10 days
following RXi’s request; provided that, in each case in which RXi intend to exercise this right (i)
they shall give the SAB Member 30 days written notice, by certified mail that they intend to
exercise their rights under this sentence, which notice shall refer to this Agreement and shall be
accompanied by (a) copies of the documents that RXi intend to execute or file, or a description of
the other acts that Companies intend to take, and (b) reasonably sufficient information about the
Invention or other intellectual property to which the documents or acts relate for the SAB Member
to make a determination of whether the document or acts



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relate to an Invention; and (ii) RXi may not exercise their rights under this sentence if the
SAB Member notifies RXi within the 30-day period referred to above that the SAB Member disagrees.




     “Inventions” shall mean, for purposes of this Section 8, ideas, discoveries,
creations, manuscripts and properties, innovations, improvements, know-how, inventions, trade
secrets, apparatus, developments, techniques, methods, biological processes, cell lines, laboratory
notebooks and formulas (whether or not patentable or copyrightable or constituting trade secrets)
conceived, made or discovered by the SAB Member (whether alone or with others) within the Field (i)
solely as a direct result of consulting with RXi under this Agreement and (ii) not in the course of
the SAB Member’s activities as an University of Massachusetts faculty member.



     RXi acknowledges and agrees that the SAB Member is bound by the UMass Provisions. In the
event of any inconsistency between the terms and provisions of this Section 8 and the UMass
Provisions, the UMass Provisions shall govern. In this respect, in no event shall the SAB Member’s
obligations hereunder relate to any right, title or interest that the SAB Member may have in ideas,
discoveries, creations, manuscripts and properties, innovations, improvements, know-how,
inventions, trade secrets, apparatus, developments, techniques, methods, biological processes, cell
lines, laboratory notebooks and formulas (whether or not patentable or copyrightable or
constituting trade secrets) conceived, made or discovered by the SAB Member (whether alone or with
others) with the use of facilities or fundings of any Affiliated Institution and that the SAB
Member is required to assign to his Affiliated Institution pursuant to the rules and regulations
of such Affiliated Institution. Further, RXi will have no rights by reason of this Agreement in
any publication, invention, discovery, improvement, or other intellectual property whatsoever,
whether or not publishable, patentable, or copyrightable, which is developed as a result of a
program of research financed, in whole or in part, by funds provided by or under the control of the
Principal Institution. The SAB Member agrees to not knowingly use or incorporate any third party
proprietary information into any Inventions or to disclose such information to RXi. Upon
termination of this Agreement with RXi, the SAB Member shall provide to RXi in writing a full,
signed statement of all Inventions in which the SAB Member participated prior to termination of
this Agreement.



     RXi acknowledges and agrees that it will enjoy no priority or advantage as a result of the
consultancy created by this Agreement in gaining access, whether by license or otherwise, to any
proprietary information or intellectual property that arises from any research undertaken by the
SAB Member in his capacity as a member of the faculty of University of Massachusetts.



     9. Confidentiality. The SAB Member may disclose to RXi any information that the SAB
Member would normally freely disclose to other members of the scientific community at large,
whether by publication, by presentation at seminars, or in informal scientific discussions.
However, the SAB Member shall not disclose to RXi information that is proprietary to the University
of Massachusetts and is not generally available to the public other than through formal technology
transfer procedures.



     During the Term, the SAB Member will be exposed to certain information concerning RXi’s
research, business, Inventions, products, proposed new products, designs, clinical testing
programs, manufacturing processes and techniques, customers, and other information and



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materials that embody trade secrets or technical or business information that is confidential
and proprietary to RXi and is not generally known to the public (collectively, “Confidential
Information”). Confidential Information shall not include information that (i) is in the
public domain on the Effective Date of this Agreement, (ii) is or was disclosed to the SAB Member
by a third party having no fiduciary relationship with RXi and having no known obligation of
confidentiality with respect to such information, (iii) is or was independently known or developed
by the SAB Member without reference to the Confidential Information as reasonably demonstrated by
the SAB Member by written records or (iv) is required by law or in a legal proceeding to be
disclosed, provided that the SAB Member shall give RXi prior written notice of such proposed
disclosure so that RXi may take such legal steps as they deem appropriate to protect the
Confidential Information. In addition, Confidential Information does not include information
generated by the SAB Member, alone or with others, unless the information (i) is generated solely
as a direct result of the performance of the Services and (ii) is not generated in the course of
the SAB Member’s activities as an University of Massachusetts faculty member. The SAB Member
hereby agrees, for a period of seven years following his receipt of such Confidential Information,
not to disclose or make use of, or allow others to use, any Confidential Information, except to
RXi’s employees and representatives, without RXi’s prior written consent, unless such information
becomes publicly available through no fault of the SAB Member; provided, however, that such
obligations of the SAB Member will expire no later than five years after the termination or
expiration of this Agreement. In addition, the SAB Member further agrees not to make any notes or
memoranda relating to the Business of RXi other than for the benefit of RXi and not to use or
permit to be used at any time any such notes or memoranda other than for the benefit of RXi.




     10. Injunctive Relief. The SAB Member agrees that any breach of this Agreement by him
could cause irreparable damage to RXi and that in the event of such breach RXi shall have the right
to obtain injunctive relief, including, without limitation, specific performance or other equitable
relief to prevent the violation of his obligations hereunder. It is expressly understood and
agreed that nothing herein contained shall be construed as prohibiting RXi from pursuing any other
remedies available for such breach or threatened breach, including, without limitation, the
recovery of damages by RXi.



     11. No Assignment by the SAB Member. The Services to be rendered by the SAB Member
are personal in nature. The SAB Member may not assign or transfer this Agreement or any of his
rights or obligations hereunder. In no event shall the SAB Member assign or delegate
responsibility for actual performance of the Services to any other natural person.



     12. Publications. The SAB Member agrees that he will not at any time during the time
limitations set forth in paragraph 9 hereof, publish any Confidential Information that becomes
known to him as a result of his relationship with RXi which is, or pursuant to the terms hereof
becomes, the property of RXi or any of its clients, customers, consultants, licensors, licensees,
or affiliates except to such extent as may be necessary in the ordinary course of performing in
good faith his duties as a member of the SAB of RXi and with the prior written consent of RXi.



     During the Term and for a period of two years thereafter, the SAB Member agrees to submit to
RXi for a period of at least 30 days (the “Review Period”) a copy of any proposed



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manuscript or other materials to be published or otherwise publicly disclosed by the SAB
Member (each a “Proposed Publication”) which contains Confidential Information or discloses
Inventions in sufficient time to enable RXi to determine if patentable Inventions or Confidential
Information would be disclosed. Nothing herein shall be construed to restrict the SAB Member’s
right to publish material which does not contain Confidential Information. Following the
expiration of the Review Period, if RXi does not notify the SAB Member that the Proposed
Publication discloses patentable Inventions or Confidential Information such Proposed Publication
shall be deemed to be approved by RXi for publication. In addition, the SAB Member will cooperate
with RXi in this respect and will delete from the manuscript or other disclosure any Confidential
Information if requested by RXi and will assist RXi in filing for patent protection for any
patentable Inventions prior to publication or other disclosure.




     13. No Conflicting Agreements. The SAB Member represents and warrants, that as of the
Effective Date, he will not be a party to any commitments or obligations that conflict with this
Agreement. In this regard, as a condition to the effectiveness of this Agreement the SAB Member
shall obtain the University of Massachusetts’s execution of Exhibit A to this Agreement. During
the Term, the SAB Member will not enter into any agreement either written or oral in conflict with
this Agreement and will arrange to provide Services under this Agreement in such a manner and at
times that such Services will not conflict with his responsibilities under any other agreement,
arrangement or understanding or pursuant to any employment relationship he has at any time with any
third party. In the event of any inconsistency between this Agreement and any agreement or policy
of any Affiliated Institution, the agreement or policy of the Affiliated Institution shall
control.



     14. Other Consulting Services. RXi agrees that the SAB Member may serve as a member
of scientific advisory boards or in a similar capacity with, and provide consulting services to,
other companies in scientific areas outside of the Field, provided that such service does not
conflict or materially interfere with his Services hereunder. RXi further agrees that the SAB
Member may serve as a member of scientific advisory boards or in a similar capacity with, and
provide consulting services to, other companies in scientific areas within the Discovery Sub-Field
(defined below), provided that such service does not conflict or materially interfere with his
Services hereunder. For purposes hereof, the term “Discovery Sub-Field” shall mean that portion of
the Field that includes the use of RNAi technology in, or the application of RNAi technology to,
the discovery or identification of targets for therapeutic products for humans or animals. The SAB
Member shall notify RXi in writing in advance of such service, provided that RXi shall hold all
such information in confidence, and provided further that the SAB Member need not provide copies of
any agreements with such other companies or any information relating to his compensation for such
services. The restrictions set forth in this Section 14 shall not apply to the SAB Member’s
relationship with Affiliated Institutions.



     15. Nonsolicitation. During the Term and for a period of one year thereafter, the SAB
Member, personally, will not, without RXi’s prior written consent, directly solicit the employment
of any employee of RXi or their affiliates with whom the SAB Member has had contact in connection
with the relationship arising under this Agreement. Nothing in this Section 15 shall be deemed to
prohibit general solicitations of employment by any Affiliated Institution.



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     16. Disclosure of Relationship. The parties each shall be entitled to disclose that
the SAB Member is serving on the SAB and RXi may use the SAB Member’s name, including in any
business plan, press release, advertisement, prospectus or other offering document of RXi or its
affiliates, so long as any such usage (a) is limited to reporting factual events or occurrences
only, and (b) is made in a manner that could not reasonably constitute a specific endorsement by
the SAB Member of RXi or of any program, product or service of RXi. However, RXi shall not use the
SAB Member’s name in any press release, or quote the SAB Member in any RXi materials (including
advertisements), or otherwise use the SAB Member’s name in a manner not specifically permitted by
the preceding sentence, unless in each case RXi obtains in advance the SAB Member’s consent. The
foregoing consents shall not be unreasonably withheld or delayed by the SAB Member.
Notwithstanding the foregoing, if, in the opinion of RXi’s counsel, RXi is required by applicable
law to use the SAB Member’s name in a press release or governmental filing and, under the
circumstances, RXi is not reasonably able to obtain the advance written consent of the SAB Member,
as applicable, to such use, then RXi may proceed without obtaining the advance written consent of
the SAB Member.



     17. Notices. All notices and other communications hereunder shall be delivered or
sent by facsimile transmission, recognized courier service, registered or certified mail, return
receipt requested. Any notice or required submission of documents to RXi made under the provisions
of this Agreement shall be deemed to have been constructively delivered to Araios for purposes of
this Agreement.


If to RXi:



Tod Woolf

Chief Executive Officer

RXi Pharmaceuticals Corporation

One Innovation Drive

Worcester, Massachusetts 01605

Fax: 908-663-2642



with a copy to:



Ropes & Gray LLP

One International Place

Boston, MA 02110

Attention: Marc A. Rubenstein, Esq.

Fax: (617) 951-7050




-11-









 







If to the SAB Member:



Tariq M. Rana, Ph.D.

University of Massachusetts

364 Plantation St., LRB 827,

Lab 860 A-E

Worcester, MA 01605

Fax: (508) 856-6464



with a copy to:



Richard B. Weinstein, Esq.

6701 Democracy Blvd., Suite 300

Bethesda, MD 20817

Fax: (301) 571-9385




     Such notice or communication shall be deemed to have been given as of the date sent by the
facsimile or delivered to a recognized courier service, or three days following the date sent by
registered or certified mail.



     18. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective legal representatives, successors and permitted
assigns. The SAB Member agrees that RXi may assign this Agreement, in whole but not in part, to
any purchaser of all or substantially all of its assets or to any successor corporation resulting
from any merger, consolidation or other reorganization of RXi with or into such corporations. RXi
also may assign this Agreement, in whole but not in part, to any person or entity controlled by, in
control of, or under common control with, RXi, if it obtains the prior written consent of the SAB
Member, which consent shall not unreasonably be withheld or delayed; provided, however, that no
such assignment shall relieve RXi of its liability to the SAB Member hereunder; and provided
further, however, that no such assignment shall be made to CytRx or any affiliate thereof without
the prior written consent of the SAB Member, which consent he may withhold in his sole and
unfettered discretion. Notwithstanding the foregoing, RXi may not enter into any transaction
pursuant to which all or substantially all of its assets or shares are acquired by a third party,
or it merges with any third party unless, in any such transaction, such third party explicitly
assumes, in writing, all of RXi’s obligations and the obligations of the “Granting Party” under
this Agreement. RXi may not otherwise assign this Agreement without the SAB Member’s prior written
consent.



     19. Indemnification. RXi shall indemnify, defend and hold harmless the SAB Member
from any claim, loss, liability or expense (including reasonable attorney’s fees) incurred by him
as a result of the performance of his Services hereunder in accordance with the terms hereof, a
material breach by RXi hereof or any gross negligence or willful misconduct by RXi or its
respective officers or directors in connection with this Agreement or otherwise relating to or
resulting from the performance of the Services hereunder, except where such claim, loss, liability
or expense is attributable primarily to the SAB Member’s own gross negligence or willful
misconduct.



-12-









 





     20. Entire Agreement; Counterparts. This Agreement constitutes the entire agreement
among the parties as to the subject matter hereof. No provision of this Agreement shall be waived,
altered or cancelled except in writing signed by the party against whom such waiver, alteration or
cancellation is asserted. This Agreement may be executed in one or more counterparts, and by
different parties hereto on separate counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.



     21. Governing Law. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Delaware, without regard to conflict of law principles.



     22. Enforceability. The invalidity or unenforceability of any provision hereof as to
an obligation of a party shall in no way affect the validity or enforceability of any other
provision of this Agreement, provided that if such invalidity or unenforceability materially
adversely affects the benefits the other party reasonably expected to receive hereunder, that party
shall have the right to terminate this Agreement. Moreover, if one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad as to scope,
activity or subject so as to be unenforceable at law, such provision or provisions shall be
construed by limiting or reducing it or them, so as to be enforceable to the extent compatible with
the applicable law as it shall then appear.



     23. Construction. This Agreement has been prepared jointly and shall not be strictly
construed against any party.



     24. Resolution of Disputes. Except as set forth below, any dispute arising under or
in connection with any matter related to this Agreement or any related agreement shall be resolved
exclusively by arbitration. The arbitration will be in conformity with and subject to the
applicable rules and procedures of the American Arbitration Association. All parties agree to be
(i) subject to the jurisdiction and venue of any arbitration or litigation in Boston,
Massachusetts; and (ii) bound by the decision of the arbitrator as the final decision with respect
to any dispute that is to be resolved by arbitration pursuant to this Agreement.



     25. Advice of Counsel. Each party acknowledges that, in executing this Agreement,
such party has had the opportunity to seek the advice of independent legal counsel, and has read
and understood all of the terms and provisions of this Agreement.



-13-









 





     IN WITNESS WHEREOF, the parties hereto have duly executed this Scientific Advisory Board
Agreement as a sealed instrument as of the date first written above.



	 	 	 	 	 
	 	RXI PHARMACEUTICALS CORPORATION

 	 
	 	By:  	/s/
Tod Woolf
	 
	 	 	Tod Woolf 	 
	 	 	Chief Executive Officer 	 
	 



SAB MEMBER




/s/ Tariq M. Rana






Name: Tariq M. Rana, Ph.D.




Social Security Number:




                                                                      




Effective Date: ___________, 2007




-14-









 








Page A1




SCHEDULE A




Conflicting Agreements




UNIVERSITY OF MASSACHUSETTS

UNIFORM CONSULTING AGREEMENT PROVISIONS



All faculty at the University of Massachusetts (the “University”) are subject to the University
Policy on Faculty Consulting and Outside Activities (the ‘Policy”). The Policy recommends that
faculty at the University attach these Uniform Consulting Agreement Provisions (“Uniform
Provisions”) to any agreement or arrangement (“Consulting Agreement”) under which a faculty member
will provide consulting services to, or will engage in other non-academic activities in his or her
area of expertise on behalf of any for-profit organization (a “Company”). These Uniform Provisions
are intended to clarify, among other things, the respective legal rights of the University and the
Company in any intellectual property and other work product that may be developed or discovered by
the faculty member in the course of performing services for the Company. If any term of the Uniform
Provisions is inconsistent with a term of the Consulting Agreement to which the Uniform Provisions
are attached, the terms of the Uniform Provisions govern.



University faculty are permitted to devote the equivalent of one day within the academic week to
the performance of outside activities, including consulting with Companies. These activities must
be reported to the Department Chair of the faculty member in order to ensure compliance with this
time restriction and the ability of the faculty member to meet his or her responsibilities to the
University. In certain instances, these activities must also be reviewed by the University’s
Conflicts Committee. The Conflicts Committee may impose restrictions on the consulting
relationship.



University faculty are ordinarily prohibited from using University-administered funds, facilities,
and equipment in the performance of services for a Company pursuant to a Consulting Agreement. In
addition, faculty must obtain special approval to involve University students in consulting or
other services for Companies. Companies may obtain access to University facilities, equipment, and
personnel under a sponsored research agreement with the University.



University faculty may not use the name of the University in relation to any outside activities,
including consulting work, except to describe their credentials.



University faculty are permitted to assign to a Company their rights in any invention, discovery,
or development (collectively, “Intellectual Property”) that arises while performing services under
a Consulting Agreement, provided that the faculty member did not use University-administered funds,
facilities, or equipment (collectively, “University Resources”) in the course of developing that
Intellectual Property. If a faculty member made significant use of University Resources, the
faculty member is contractually obligated to assign to the University all of his or her rights in
that Intellectual Property.




 









 








Page A2



The University presumes that a faculty member did make significant use of University Resources in
the development of Intellectual Property that is the same as, directly related to, or substantially
similar to a research project in which that faculty member is engaged at the University. In order
to avoid any confusion regarding ownership of Intellectual Property, the University has determined
and Company agrees that the field of services to be provided under this Consulting Agreement is
directly related to or substantially similar to the research projects undertaken by the faculty
member at the University. Therefore, any Intellectual Property developed by the faculty member
during the term of this Consulting Agreement is owned by the University, and the Company may enter
into negotiations to obtain license rights to the Intellectual Property.



No Consulting Agreement may limit the ability of a University faculty member to use or publish
information that (a) was developed, discovered, or acquired by the faculty member in the course of
research performed at the University or otherwise outside the scope of the consulting services, (b)
was in the public domain before the consulting services were performed (c) entered the public
domain by means other than an unauthorized disclosure resulting from an act or omission by the
faculty member, (d) was known to the faculty member or the University before the consulting
services were performed, or (e) is required to be disclosed in order to comply with applicable law,
regulations, or a court order.



A Company may require a faculty member to leave with the Company any notes, data, and records
developed in the performance of consulting services, provided that the faculty member may retain
one copy of those documents for archival purposes.



Companies should be aware that, in addition to the Policy, University faculty are subject to the
University Intellectual Property Policy and the University Policy on Conflicts of Interest Relating
to Intellectual Property and Commercial Ventures. The University will make the three policies
available upon request.



These Uniform Provisions remain in effect during the entire term of the Consulting Agreement to
which they are attached.




[Signature page follows.]




 









 








Page A3




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	AGREED AND ACCEPTED:	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Faculty Member	 	 	 	 	 	RXi
Pharmaceuticals Corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Tariq Rana	 	 	 	By:	 	/s/ Tod Woolf	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Printed Name: 	Tariq
M. Rana	 	 	 	 	 	Printed Name: 	 	 	 
	 
	 	Date:	2/16/07	 	 	 	 	 	Title:	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	Date:	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	University of
Massachusetts	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Richard Stanton	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Printed Name: 	Richard Stanton	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Title:	Deputy
Chancellor	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Date:	2/16/07	 	 	 	 	 	 	 	 	 	 	 	 





 











 







RXi Pharmaceuticals Corporation

One Innovation Drive

Worcester, MA 10605

April 30, 2007





Tariq M. Rana, Ph.D.


University of Massachusetts Medical School


364 Plantation Street, LRB 827


Worcester, MA 01605






Re:        Scientific Advisory Board Agreement between Tariq M. Rana, Ph.D. and RXi Pharmaceuticals Corporation dated as of February 26, 2007 (the “Agreement”)






Dear Dr. Rana:



     We are
writing to confirm our mutual understanding concerning certain matters in connection with
the above-referenced Agreement.  Capitalized terms used but not defined in this letter
shall have the meaning given them in the Agreement.  We agree as follows:






     RXi shall,
 as additional consideration for your services to be rendered under the Agreement, at the first
regularly scheduled meeting of the Board of Directors of RXi following the Effective Date,
grant to you an option (the “Additional Option”) to purchase a number of shares equal
to 1/280th of the number of shares of common stock of RXi held by CytRx immediately prior to
the Equity Funding.  The Additional Option shall have a per share exercise price equal to the
price per share paid for RXi stock in the Equity Funding, shall have a ten year term from the
date of grant and shall be exercisable in full from and after the day before the fifth
anniversary of the Effective Date (the “Vesting Date”), provided that prior to the
Vesting Date you have not terminated the Agreement without Good Reason and RXi has not
terminated the Agreement for Cause prior to the Vesting Date.  Except as set forth in the
preceding sentence regarding termination by RXi for Cause and termination by you without
Good Reason prior to the Vesting Date, the Additional Option shall remain outstanding and
shall continue to vest on the Vesting Date notwithstanding any prior termination of the
Agreement or your consulting relationship with the RXi.  For purposes hereof:  (i) the
failure of RXi to offer, by notice to you given prior to the end of the initial four year
term of the Agreement, to extend the Agreement for an additional period of one year
following the initial four year Term on terms at least as favorable as are currently
set forth in the Agreement shall be deemed to be a termination by RXi without Cause
(which shall cause the Additional Option to remain outstanding and continue to vest
on the Vesting Date); and (ii) the failure of you to accept RXi’s offer to extend the
Agreement for an additional period of one year following the initial four year Term on terms
at least as favorable as are currently set forth in the Agreement shall be deemed to be
a termination by you without Good Reason (which shall cause the Additional Option to lapse).
From and after




 









 








the Vesting Date, the Additional
Option shall not be subject to lapse for any reason (including, without limitation,
a subsequent termination for Cause or termination without Good Reason) prior to the end
of the 10 year term.  The Additional Option will otherwise be on such terms as set forth
in the standard form of RXi’s nonqualified stock option agreement.  The terms of
Section 3(A)(2) of the Agreement shall apply to the Additional Option to the extent not
inconsistent with the terms of this paragraph.


     In
addition, RXi will pay to you $10,000 within thirty (30) days following the Equity
Funding, in addition to the compensation set forth in the Agreement.


     If
you are in agreement with the foregoing, please countersign this letter where indicated below
and return it to the undersigned at your earliest convenience.








	 	 	 	 	 
	 	Very truly yours,



RXI PHARMACEUTICALS CORPORATION

 	 
	 	By:  	/s/
Tod Woolf  4/30/07	 



	 	 	 	 	 
	 
	AGREED:

 	 	 
	
Tariq M. Rana, Ph.D.	 	 
	 
	/s/ Tariq M. Rana	 	 
	 	 	 
	 
	Date: 4/30/2007