exv10w1





Exhibit 10.1



NEITHER THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE HAVE 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.




RXI PHARMACEUTICALS CORPORATION




WARRANT




			
	 	 	 
	Warrant No. A- 1
	 	Dated: August 7, 2008






     RXi Pharmaceuticals Corporation, a Delaware corporation (the “Company”), hereby certifies
that, for value received, J.P. Turner Partners, LP or its registered Permitted Transferees
(together, the “Holder”), as registered owner of this warrant (the “Warrant”), is entitled to
purchase from the Company up to a total of 190,000 shares (as adjusted from time to time as
provided in Section 10) of Common Stock, at an exercise price equal to $7.036 per share (as
adjusted from time to time as provided in Section 10, the “Exercise Price”), upon such
shares becoming Vested Shares, at any time and from time to time from and after the date of this
Warrant (the “Initial Exercise Date”) to and including August 7, 2013 (the “Expiration Date” and
the period starting with the Initial Exercise Date and ending on the Expiration Date is referred to
as the “Term”), and subject to the following terms and conditions:



     1. Definitions. The capitalized terms used herein and not otherwise defined shall
have the meanings set forth below:



               “Affiliate” of any specified Person means any other person or entity directly or indirectly
controlling, controlled by or under direct or indirect common control with such specified Person.
For purposes of this definition, “control” means the power to direct the management and policies of
such Person or firm, directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.



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



               “Common Stock” means the common stock of the Company, $0.0001 par value per share.



               “Eligible Market” means any of the New York Stock Exchange, the American



 









 




Stock Exchange or Nasdaq (as defined below), and any successor markets thereto.




               “Exchange Act” means the Securities Exchange Act of 1934, as amended



               “Market Price” shall mean (i) if the principal trading market for such securities is an
exchange, the average of the last reported sale prices per share for the last ten previous Trading
Days in which a sale was reported, as officially reported on any consolidated tape or (ii) if
clause (i) is not applicable, the average of the closing bid price per share for the last ten
previous Trading Days as set forth in the National Quotation Bureau sheet listing for such
securities. Notwithstanding the foregoing, if there is no reported sales price or closing bid
price, as the case may be, on any of the ten Trading Days preceding the event requiring a
determination of Market Price hereunder, then the Market Price shall be determined in good faith
after reasonable investigation by resolution of the Board of Directors of the Company.



               “Nasdaq” means the Nasdaq Global Market or Nasdaq Capital Market, and any successor markets
thereto.



               “Permitted Transferees” means only Persons who are the directors, officers and employees of
the Holder.



               “Person” means any court or other federal, state, local or other governmental authority or
other 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.



               “Trading Day” means (a) any day on which the Common Stock is listed or quoted and traded on
any Eligible Market or (b) if the Common Stock is not then quoted and traded on any Eligible
Market, then a day on which trading occurs on the Nasdaq Global Market (or any successor thereto).



               “Vested Shares” means Warrant Shares that have become vested as described in and pursuant to
Section 4 hereunder.



               “Warrant Shares” shall initially mean shares of Common Stock and in addition may include Other
Securities and Substituted Property (as defined in Section 10(e)(x)) issued or issuable
from time to time upon exercise of this Warrant.



     2. 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 registered 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.



 









 





     3. Registration of Transfers. The Company shall register the transfer of any portion
of this Warrant in the Warrant Register, which transfer shall only be made to a Permitted
Transferee and in accordance with applicable securities laws, upon surrender of this Warrant, with
the Form of Assignment attached hereto as Appendix A duly completed and signed, to the
Company at its address specified herein. Upon any such registration and transfer, a new warrant in
substantially the form of a Warrant (any such new warrant, a “New Warrant”), evidencing the portion
of this Warrant so transferred shall be issued to the Permitted 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 Permitted Transferee thereof shall
be deemed the acceptance by such Permitted Transferee of all of the rights and obligations of a
holder of a Warrant.



     4. Vesting of Warrant Shares. The Warrant Shares issued hereunder shall vest in four
installments (the “Installments”) as described in this Section 4. The first Installment in the
amount of 94,000 shares shall vest on the Initial Exercise Date, and each of the three remaining
Installments, each in the amount of 32,000 shares, shall vest on each of December 6, 2008, January
6, 2009 and February 6, 2009 unless the letter agreement between J.P. Turner Partners, LP and the
Company dated August 7, 2008 has not been terminated prior to each such date.



     5. Exercise and Duration of Warrant.



          (a) The Vested Shares under this Warrant shall be exercisable, either in its entirety or for a
portion of the number of Vested Shares, by the registered Holder at any time and from time to time
from and after the Initial Exercise Date to and including the Expiration Date. At 5:00 P.M.
Boston, Massachusetts time on the Expiration Date, the portion of this Warrant not exercised prior
thereto shall be and become void and of no value, and the Holder hereof shall have no right to
purchase any additional Warrant Shares hereunder.




          (b) A Holder may exercise this Warrant by delivering to the Company, in accordance with
Section 13, this Warrant, together with (i) an exercise notice, in the form attached hereto
as Appendix B (the “Exercise Notice”), appropriately completed and duly signed, and (ii)
(A) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is
being exercised pursuant to a Cash Exercise (as set forth in Section 5(c) below) or (B) if
available pursuant to Section 5(d) below, by notifying the Company that this Warrant is
being exercised pursuant to a Cashless Exercise (as set forth in Section 5(d) below), and
the date such items are received by the Company is an “Exercise Date.” Execution and delivery of
an Exercise Notice in respect of less than all of the Warrant Shares issuable upon exercise of this
Warrant shall result in the cancellation of the original Warrant and issuance of a New Warrant
evidencing the right to purchase the remaining number of Warrant Shares.




          (c) Cash Exercise. In the event the Holder has elected to pay the Exercise Price in cash, it
shall pay the Exercise Price by certified bank check payable to the order of the Company or by wire
transfer of immediately available funds in accordance with the Company’s instructions (a “Cash
Exercise”).




          (d) Cashless Exercise. Notwithstanding anything contained herein to the contrary, the Holder
may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making



 









 






the cash payment otherwise contemplated to be made to the Company upon such exercise in
payment of the Exercise Price, elect instead to receive upon such exercise the “Net Number” of
shares of Common Stock determined according to the following formula (a “Cashless Exercise”):




	 	 	 	 	 	 	 
	 
	 	Net Number =	 	(A*B) — (A*C)	 	 
	 
	 	 	 

B	 	 





For purposes of the foregoing formula,




A = the total number of shares with respect to which this Warrant is then being
exercised.



B = the closing price per share of the Common Stock (as reported by Bloomberg) on
the Trading Day immediately preceding the date of the Exercise Notice.



C = the Exercise Price then in effect for the applicable Warrant Shares at the time
of such exercise.



          (e) Except as otherwise provided for herein, this Warrant shall not entitle the Holder to any
voting rights or other rights as a stockholder of the Company by virtue of the ownership hereof.




     6. Delivery of Warrant Shares.



          (a) Upon exercise of this Warrant, the Company shall promptly issue or cause to be issued and
deliver or cause to be delivered to the Holder, in such name or names as the Holder may designate,
a certificate for the Warrant Shares issuable upon such exercise (the “Certificate”) bearing no
restrictive legends. The Holder, or any Person so designated by the Holder to receive the Warrant
Shares, shall be deemed to have become holder of record of such Warrant Shares as of the Exercise
Date.




          (b) Neither these securities nor the securities for which these securities are exercisable
have been registered with the Commission or the securities commission of any state in reliance upon
an exemption from registration under the Securities Act of 1933 (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. The Holder acknowledges and agrees that the Warrant may be sold only
pursuant to an applicable exemption from the registration requirements of the Securities Act and
that the Warrant Shares may only be sold pursuant to an effective registration statement under the
Securities Act or in accordance with any applicable exemption from the registration requirements of
the Securities Act.




          (c) This Warrant is exercisable, either in its entirety or, from time to time, for a portion
of the number of Warrant Shares. Upon surrender of this Warrant following one or more



 









 






partial exercises, the Company shall issue or cause to be issued, at its expense, a New
Warrant evidencing the right to purchase the remaining number of Warrant Shares.




     7. Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of
Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue
or transfer tax, transfer agent fee or other incidental tax or expense in respect of the issuance
of such certificates, 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 issue, delivery or registration of any certificates for Warrant Shares
or Warrant in a name other than that of the Holder and that the Holder will be required to pay any
tax with respect to cash received in lieu of fractional shares. 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.



     8. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed,
the Company, at the sole expense of the Holder (such expenses, if any imposed by the Company to be
reasonable), shall issue or cause to be issued in exchange and substitution for and upon
cancellation hereof, or in lieu of and in 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, if requested by the Company.



     9. 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 all taxes, liens, claims,
encumbrances with respect to the issuance of such Warrant Shares and will not be subject to any
pre-emptive rights or similar rights (taking into account the adjustments and restrictions of
Section 10 hereof). The Company covenants 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, fully paid and nonassessable. The
Company will take all such action as may be necessary to assure that such shares of Common Stock
may be issued as provided herein without violation of any applicable law or regulation, or of any
requirements of any securities exchange or automated quotation system upon which the Common Stock
may be listed or quoted, as the case may be; provided, however, that such actions shall only
require the Company’s best efforts (or other specified standard) to the extent specifically
provided for in this Warrant.



     10. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable
upon exercise of this Warrant are subject to adjustment from time to time as set forth in this
Section 10.



          (a) Stock Dividends. If the Company, at any time while this Warrant is outstanding, pays a
dividend on its Common Stock payable in additional shares of Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in shares of Common Stock, then in each
such case the Exercise Price shall be multiplied by a fraction, (A) the numerator of which shall be
the number of shares of Common Stock outstanding immediately



 









 






prior to the opening of business on the day after the record date for the determination of
stockholders entitled to receive such dividend or distribution and (B) the denominator of which
shall be the number of shares of Common Stock outstanding immediately after the distribution date
of such dividend or distribution. Any adjustment made pursuant to this Section 10(a) shall
become effective immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution; provided, however, that if following such record date the
Company rescinds or modifies such dividend or distribution, the Exercise Price shall be
appropriately adjusted (as of the date that the Company effectively rescinds or modifies such
dividend or distribution) to take into account the effect of such rescinded or modified dividend or
distribution on the Exercise Price pursuant to this Section 10(a).




          (b) Stock Splits. If the Company, at any time while this Warrant is outstanding, (i)
subdivides outstanding shares of Common Stock into a larger number of shares, or (ii) combines
outstanding shares of Common Stock into a smaller number of shares, then in each such case the
Exercise Price shall be multiplied by a fraction, (A) the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such event and (B) the denominator of which
shall be the number of shares of Common Stock outstanding immediately after such event. Any
adjustment pursuant to this Section 10(b) shall become effective immediately after the
effective date of such subdivision or combination.




          (c) Reclassifications. A reclassification of the Common Stock (other than any such
reclassification in connection with a merger or consolidation to which Section 10(e)
applies) into shares of any other class of stock shall be deemed:




               (i) a distribution by the Company to the holders of its Common Stock of such shares of such
other class of stock for the purposes and within the meaning of this Section 10; and



               (ii) if the outstanding shares of Common Stock shall be changed into a larger or smaller
number of shares of Common Stock as part of such reclassification, such change shall be deemed a
subdivision or combination, as the case may be, of the outstanding shares of Common Stock for the
purposes and within the meaning of Section 10(b).



          (d) Other Distributions. If the Company, at any time while this Warrant is outstanding,
distributes to holders of Common Stock (i) evidences of its indebtedness, (ii) shares of any class
of capital stock, (iii) rights or warrants to subscribe for or purchase any shares of any class of
capital stock or (iv) any other asset, other than a distribution of Common Stock covered by
Section 10(a), (in each case, “Distributed Property”), then in each such case the Exercise
Price in effect immediately prior to the record date fixed for determination of stockholders
entitled to receive such distribution (and the Exercise Price thereafter applicable) shall be
adjusted (effective on and after such record date) to equal the product of such Exercise Price
multiplied by a fraction, (A) the numerator of which shall be Market Price on such record date less
the then fair market value of the Distributed Property distributed in respect of one outstanding
share of Common Stock, which, if the Distributed Property is other than cash or marketable
securities, shall be as determined in good faith by the Board of Directors of the Company whose
determination shall be described in a board resolution, and (B) the denominator of which shall be
the Market Price on such record date; provided, however, that if following the



 









 






record date for such distribution the Company rescinds or modifies such distribution, the
Exercise Price shall be appropriately adjusted (as of the date that the Company effectively
rescinds or modifies such distribution) to take into account the effect of such rescinded or
modified distribution on the Exercise Price pursuant to this Section 10(d).




          (e) Fundamental Transactions. If, at any time following the Initial Exercise Date, (i) the
Company effects any merger or consolidation of the Company with or into another Person, (ii) the
Company effects any sale of all or substantially all of its assets in one or a series of related
transactions or (iii) there shall occur any merger of another Person into the Company whereby the
Common Stock is cancelled, converted or reclassified into or exchanged for other securities, cash
or property (in any such case, a “Fundamental Transaction”), then, as a condition to the
consummation of such Fundamental Transaction, the Company shall (or, in the case of any Fundamental
Transaction in which the Company is not the surviving entity, the Company shall take all reasonable
steps to cause such other Person to) shall, at its election in its sole discretion:




               (I) execute and deliver to the Holder of this Warrant a written instrument providing that:



                    (x) so long as this Warrant remains outstanding, upon the exercise hereof at any time on or
after the consummation of such Fundamental Transaction and on such terms and subject to such
conditions as shall be nearly equivalent as may be practicable to the provisions set forth in this
Warrant, this Warrant shall be exercisable into, in lieu of Common Stock issuable upon such
exercise prior to such consummation, the securities or other property (the “Substituted Property”)
that would have been received in connection with such Fundamental Transaction by a holder of the
number of shares of Common Stock into which this Warrant was exercisable immediately prior to such
Fundamental Transaction, assuming such holder of Common Stock:



                         (A) is not a Person with which the Company consolidated or into which the Company merged or
which merged into the Company or to which such sale or transfer was made, as the case may be (a
“Constituent Person”), or an Affiliate of a Constituent Person; and



                         (B) failed to exercise such Holder’s rights of election, if any, as to the kind or amount of
securities, cash and other property receivable in connection with such Fundamental Transaction
(provided, however, that if the kind or amount of securities, cash or other property receivable in
connection with such Fundamental Transaction is not the same for each share of Common Stock held
immediately prior to such Fundamental Transaction by a Person other than a Constituent Person or an
Affiliate thereof and in respect of which such rights of election shall not have been exercised (a
“Non-Electing Share”), then, for the purposes of this Section 10(e), the kind and amount of
securities, cash and other property receivable in connection with such Fundamental Transaction by
each Non-Electing Share shall be deemed to be the kind and amount so receivable per share by a
plurality of the Non-Electing Shares); and



                    (y) the rights and obligations of the Company (or, in the event of a transaction in which the
Company is not the surviving Person, such other Person) and the Holder in respect of Substituted
Property shall be as nearly equivalent as may be practicable to the rights and obligations of the
Company and Holder in respect of Common Stock hereunder.



 









 





               Such written instrument shall provide for adjustments which, for events subsequent to the
effective date of such written instrument, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section 10. The above provisions of this Section
10(e) shall similarly apply to successive Fundamental Transactions, or



               (II) cause to be delivered to the Holder, as soon as practicable following the closing of the
Fundamental Transaction, the Substituted Property less such portion of the Substituted Property
with a value (determined in good faith by the Board of Directors of the Company or the other Person
in the Fundamental Transaction) equal to the aggregate Exercise Price of this Warrant.



          (f) Adjustment of Warrant Shares. Simultaneously with any adjustment to the Exercise Price
pursuant to paragraphs (a) through (d) of this Section 10, the number of Warrant Shares
that may be purchased upon exercise of this Warrant shall be increased or decreased
proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for
the increased or decreased number of Warrant Shares shall be the same as the aggregate Exercise
Price payable for the Warrant Shares immediately prior to such adjustment.




          (g) Calculations. All calculations under this Section 10 shall be made to the nearest
cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for the account of the
Company, and the disposition of any such shares shall be considered an issue or sale of Common
Stock.




          (h) Adjustments. Notwithstanding any provision of this Section 10, no adjustment of
the Exercise Price shall be required if such adjustment is less than $0.01; provided, however, that
any adjustments which by reason of this Section 10(h) are not required to be made shall be
carried forward and taken into account for purposes of any subsequent adjustment required to be
made hereunder.




          (i) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 10, the Company will promptly deliver to the Holder a certificate executed by the
Company’s Chief Financial Officer setting forth, in reasonable detail, the event requiring such
adjustment and the method by which such adjustment was calculated, the adjusted Exercise Price and
the adjusted number or type of Warrant Shares or other securities issuable upon exercise of this
Warrant (as applicable). The Company will retain at its office copies of all such certificates and
cause the same to be available for inspection at said office during normal business hours by the
Holder or any prospective purchaser of the Warrant designated by the Holder.




          (j) Notice of Corporate Events. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common Stock, including,
without limitation, any granting of rights or warrants to subscribe for or purchase any capital
stock of the Company or any subsidiary of the Company, (ii) authorizes, approves, enters into any
agreement contemplating, or solicits stockholder approval for, any Fundamental Transaction or (iii)
authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then
the Company shall deliver to the Holder a notice describing the material terms and conditions of
such transaction at least 10 calendar days prior to the applicable record or



 









 






effective date on which a Person would need to hold Common Stock in order to participate in or
vote with respect to such transaction, and the Company will take all steps reasonably necessary in
order to ensure that the Holder is given the practical opportunity to exercise this Warrant prior
to such time so as to participate in or vote with respect to such transaction; provided, however,
that the failure to deliver such notice or any defect therein shall not affect the validity of the
corporate action required to be described in such notice.




     11. Registration Rights.



          (a) General. If at any time after the date hereof the Company proposes to register any of its
Common Stock under the Securities Act in connection with the public offering of such securities for
its own account or for the accounts of shareholders other than Holder, solely for cash on a form
that would also permit the registration of the Warrant Shares, the Company shall, each such time,
promptly give Holder written notice of such determination. Upon the written request of Holder
given within fifteen (15) days after the giving of any such notice by the Company, the Company
shall, subject to the limitations set forth in Section 11(e), use its best efforts to cause
to be registered under the Securities Act all of the Warrant Shares that Holder has requested be
registered; provided, that the Company shall have the right to postpone or withdraw any
registration statement relating to an offering in which the Holder is eligible to participate under
this Section 11 without any liability or obligation to the Holder under this Section
11. For the avoidance of doubt, the Company shall not be obligated to effect any registration
of Warrant Shares under this Section 11 incidental to the registration of any of its
securities in connection with the Company’s Registration Statement on Form S-1 filed by the Company
in connection with the private placement of the Company’s Common Stock in June of 2008.




               (i) Other Contractual Obligations of the Company. Each exercise of all or part of the
Warrant by the Holder pursuant to Section 5 herein shall serve as Holder’s acknowledgment
and acceptance that the Holder’s rights under this Section 11 as to the Warrant Shares
received as the result of such exercise are subject to the contractual obligations of the Company
as of the Effective Date, including the Company’s obligations to CytRx Corporation set out in the
Contribution Agreement dated as of April 30, 2007 between CytRx Corporation and the Company, as
amended on July 28, 2008.



          (b) Obligations of the Company. Whenever required under this Section 11 to use its
best efforts to effect the registration of any Warrant Shares, the Company shall, as expeditiously
as reasonably possible:




               (i) Prepare and file with the SEC a registration statement with respect to such Warrant
Shares and use its best efforts to cause such registration statement to become effective, and, upon
the request of the Holder, keep such registration statement effective for a period of up to one (1)
year or, if earlier, until the distribution contemplated in the registration statement has been
completed; provided, however, that (i) such one (1) year period shall be extended for a period of
time equal to the period the Holder refrains from selling any securities included in such
registration at the request of an underwriter of Common Stock (or other securities) of the Company;
and (ii) in the case of any registration of Warrant Shares on Form S-3 which are intended to be
offered on a continuous or delayed basis, subject to compliance with applicable



 









 




SEC rules, such one (1) year period shall be extended for up to ninety (90) days, if
necessary, to keep the registration statement effective until all such Warrant Shares are sold.




               (ii) Prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement.



               (iii) Furnish to the Holder such numbers of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such other documents as
they may reasonably request in order to facilitate the disposition of such Warrant Shares owned by
it.



               (iv) Use its best efforts to register and qualify the securities covered by such registration
statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably
appropriate for the distribution of the securities covered by the registration statement, provided
that the Company shall not be required in connection therewith or as a condition thereto to qualify
to do business or to file a general consent to service of process in any such states or
jurisdictions, and further provided that (anything in this Section 11 to the contrary
notwithstanding with respect to the bearing of expenses) if any jurisdiction in which the
securities shall be qualified shall require that expenses incurred in connection with the
qualification of the securities in that jurisdiction be borne by shareholders, then such expenses
shall be payable by the Holder to the extent required by such jurisdiction.



               (v) Provide a transfer agent for the Common Stock no later than the effective date of the
first registration of any Warrant Shares.



               (vi) Otherwise use its best efforts to comply with all applicable rules and regulations of the
SEC.



               (vii) Use its best efforts to cause all such Warrant Shares to be listed on a national
securities exchange (if such securities are not already so listed) and on each additional national
securities exchange on which similar securities issued by the Company are then listed, if the
listing of such securities is then permitted under the rules of such exchange.



               (viii) Use every reasonable effort to prevent the issuance of any stop order suspending the
effectiveness of such registration statement or of any order preventing or suspending the use of
any preliminary prospectus and, if any such order is issued, to obtain the lifting thereof at the
earliest reasonable time.



          (c) Furnish Information. It shall be a condition precedent to the obligations of the Company
to take any action pursuant to this Section 11 with respect to the registration of any of
the Holder’s Warrant Shares that the Holder shall take such actions and furnish to the Company such
information regarding itself, the Warrant Shares held by it, and the intended method of disposition
of such securities, as the Company shall reasonably request and as shall be required in connection
with any registration, qualification or compliance referred to in this agreement, including,
without limitation (i) in connection with an underwritten offering, enter into an appropriate
underwriting agreement containing terms and provisions then customary in



 









 






agreements of that nature, (ii) enter into such custody agreements, powers of attorney and
related documents at such time and on such terms and conditions as may then be customarily required
in connection with such offering and (iii) distribute the Warrant Shares only in accordance with
and in the manner of the distribution contemplated by the applicable registration statement and
prospectus. In addition, the Holder shall promptly notify the Company of any request by the
Commission or any state securities commission or agency for additional information or for such
registration statement or prospectus to be amended or supplemented.




          (d) Registration Expenses. All expenses (excluding underwriters’ discounts and commissions)
incurred in connection with any registration pursuant to this Section 11 including, without
limitation, any additional registration and qualification fees and any additional fees and
disbursements of counsel to the Company that result from the inclusion of securities held by the
Holder in such registration, shall be borne by the Company whether or not the registration
statement to which such registration expenses relate becomes effective.




          (e) Underwriting Requirements.




               (i) In connection with any offering under this Section 11 involving an underwriting of
shares being issued by the Company, the Company shall not be required to include any Warrant Shares
in such underwriting unless the Holder accepts the terms of the underwriting as agreed upon between
the Company and the underwriters selected by it, and then only in such quantity as will not, in the
sole discretion of the underwriters, jeopardize the success of the offering by the Company. If the
total amount of securities that the Holder requests to be included in an underwritten offering
under this Section 11 exceeds the amount of securities that the underwriters reasonably
believe compatible with the success of the offering, the Company may exclude some or all of the
Warrant Shares from such registration and underwriting.



               (ii) With respect to any underwritings of shares to be registered under this Section
11, the Company shall have the right to designate the managing underwriter or underwriters.



          (f) Delay of Registration. The Holder shall not have any right to take any action to
restrain, enjoin, or otherwise delay any registration as the result of any controversy that might
arise with respect to the interpretation or implementation of this Section 11.




          (g) Indemnification. In the event any Warrant Shares are included in a registration statement
under this Section 11:




               (i) To the extent permitted by law, in connection with any registration statement in which
Warrant Shares are included, the Company will indemnify and hold harmless the Holder and its
officers, directors and stockholders, legal counsel and accountants for the Holder, any underwriter
(as defined in the Securities Act) for the Holder and each person, if any, who controls the Holder
or underwriter within the meaning of the Securities Act or the 1934 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 on (i) any untrue or alleged untrue statement of any
material fact contained in such registration statement, including, without



 









 




limitation, any prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein not misleading or (iii)
any violation by the Company of any rule or regulation promulgated under the Securities Act
applicable to the Company and relating to action or inaction required of the Company in connection
with any such registration; and will promptly reimburse the Holder, and any underwriter,
controlling person or other aforementioned 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 indemnity agreement contained in this Section
11g(i) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld or delayed) nor shall the Company be liable to the Holder, or any
underwriter, controlling person or other aforementioned person in any such case for any such loss,
claim, damage, liability or action to the extent that it (i) arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission made in connection
with such registration statement, preliminary prospectus, final prospectus, or amendments or
supplements thereto, in reliance upon and in conformity with written information furnished to the
Company expressly for use in connection with such registration by or on behalf of the Holder, or
any underwriter, controlling person or other aforementioned person, (ii) is caused by the failure
of the Holder to deliver a copy of the final prospectus relating to such Warrant Shares, as then
amended or supplemented, in connection with a purchase, if the Company had previously furnished
copies thereof to the Holder or (iii) is caused by the Holder’s disposition of Warrant Shares
during any period during which the Holder is obligated to discontinue any disposition of Warrant
Shares under Section 11(j).




               (ii) To the extent permitted by law, the Holder will indemnify and hold harmless the Company,
each of its directors, each of its officers who has signed the registration statement, each person,
if any, who controls the Company within the meaning of the Securities Act, and any underwriter
(within the meaning of the Securities Act) for the Company against any losses, claims, damages or
liabilities to which the Company or any such director, officer, controlling person or underwriter
may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereto) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in such registration
statement, including any prospectus or final prospectus contained therein or any amendments or
supplements thereto or (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in conformity with written
information relating to and furnished to the Company by the Holder expressly for use in connection
with such registration; and will promptly reimburse the Company or any such director, officer,
controlling person or underwriter 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 indemnity agreement contained in this Section 11(g)(ii) shall
not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if
such settlement is effected without the consent of the Holder (which consent shall not be
unreasonably withheld or delayed) and provided further that the Holder shall not have any liability
under this Section 11(g)(ii) in excess of the net proceeds



 









 




actually received by the Holder in the relevant public offering.




               (iii) Promptly after receipt by an indemnified party under this Section 11(g) of
notice of the commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 11(g), notify the
indemnifying party in writing of the commencement thereof and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires, jointly with any
other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties. The failure to notify an indemnifying party promptly of the
commencement of any such action, if prejudicial to his ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party under this Section 11(g),
but the omission so to notify the indemnifying party will not relieve him of any liability that he
may have to any indemnified party otherwise than under this Section 11(g).



               (iv) If the indemnification provided for in this Section 11(g) is required by its
terms but is for any reason held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party under Section 11(g)(i) or Section 11(g)(ii) in respect of any
losses, claims, damages, liabilities or expenses referred to herein, then each applicable
indemnifying party shall contribute to the amount paid or payable by such indemnified party as a
result of any losses, claims, damages, liabilities or expenses referred to herein in such
proportion as is appropriate to reflect the relative fault of the Company and the Holder in
connection with the statements or omissions described in such Section 11(g)(i) or
Section 11(g)(ii) which resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations. The relative fault of the Company and the
Holder shall be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Holder and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include, subject to the limitations set forth in this
Section 11(g), any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim. The provisions set forth in
Section 11(g)(iii) with respect to notice of commencement of any action shall apply if a
claim for contribution is to be made under this Section 11(g)(iv); provided, however, that
no additional notice shall be required with respect to any action for which notice has been given
under Section 11(g)(iii) for purposes of indemnification. The Company and the Holder agree
that it would not be just and equitable if contribution pursuant to this Section 11(g) were
determined solely by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in this paragraph. Notwithstanding the
provisions of this Section 11(g)(iv), the Holder shall not be required to contribute an
amount in excess of the net proceeds actually received by the Holder in the relevant public
offering. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.



          (h) Payment of Expenses. The Company shall pay all reasonable expenses of the Holder
(including the reasonable expenses of legal counsel for such Holder) incurred in connection with
each registration of Warrant Shares requested pursuant to this Section 11, other



 









 






than underwriting discount and commission, if any, and applicable transfer taxes, if any.




          (i) No Transfer of Registration Rights. The registration rights and obligations of the Holder
under this Exhibit with respect to any Warrant Shares may not be transferred to any third party
other than any acquirer of all or substantially all of the assets or outstanding shares of stock of
the Holder or any entity that merges with or into the Holder.




          (j) Future Events. If the Holder is at the time participating in a registration of Warrant
Shares requested pursuant to this Section 11, the Company will notify the Holder of the
occurrence of any of the following events of which the Company is actually aware, and when so
notified, the Holder will immediately discontinue any disposition of Warrant Shares until notified
by the Company that such event is no longer applicable:




               (i) the issuance by the Commission or any state securities commission or agency of any stop
order suspending the effectiveness of the registration statement or the initiation of any
proceedings for that purpose (in which case the Company will make reasonable efforts to obtain the
withdrawal of any such order or the cessation of any such proceedings); or



               (ii) the existence of any fact which makes untrue any material statement made in the
registration statement or prospectus or any document incorporated therein by reference or which
requires the making of any changes in the registration statement or prospectus or any document
incorporated therein by reference in order to make the statements therein not misleading (in which
case the Company will make reasonable efforts to amend the applicable document to correct the
deficiency).



          (k) Termination of Rights. The rights of the Holder pursuant to this Section 11 shall
terminate and be of no further force and effect on the earlier of (i) the date that all Warrant
Shares have been sold by the Holder or (ii) the date that all Warrant Shares may be sold in any
three month period pursuant to Rule 144(b) promulgated under the Securities Act of 1933, as
amended.




     12. Fractional Shares. The Company shall not be required to issue or cause to be
issued fractional Warrant Shares on the exercise of this Warrant. If any fraction of a Warrant
Share would, except for the provisions of this Section 12, be issuable upon exercise of
this Warrant, the Company shall make a cash payment to the Holder equal to (a) such fraction
multiplied by (b) the Market Price on the Exercise Date of one full Warrant Share.



     13. Remedies. The Company stipulates that the remedies at law of the Holder of this
Warrant in the event of any default or threatened default by the Company in the performance of or
compliance with any of the terms of this Warrant are not and will not be adequate, and that such
terms may be specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms hereof or otherwise.



     14. Notices. Any and all notices or other communications or deliveries hereunder
(including without limitation any Exercise Notice) shall be in writing and shall be mailed by



 









 




certified mail, return receipt requested, or by a nationally recognized courier service or
delivered (in person or by facsimile), against receipt to the party to whom such notice or other
communication is to be given. Any notice or other communication given by means permitted by this
Section 14 shall be deemed given at the time of receipt thereof. The address for such
notices or communications shall be as set forth below:




	 	 	 
	If to the Company:

	 	Tod Woolf
	 

	 	Chief Executive Officer
	 

	 	RXi Pharmaceuticals Corporation
	 

	 	60 Prescott Street
	 

	 	Worcester, Massachusetts 01605
	 

	 	Fax: 508-767-3862
	 
	 	 
	If to the Holder:

	 	J.P. Turner Partners, LP
	 

	 	Attention: Patrick J. Power
	 

	 	3060 Peachtree Road, 11th FL
	 

	 	Atlanta, GA 30305
	 

	 	Phone: 404-479-8300
	 

	 	Fax: 888-704-7512





Or such other address as is provided to such other party in accordance with this Section
14.




     15. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon
a prompt written notice to the Holder, the Company may appoint a new warrant agent. Any Person
into which any new warrant agent may be merged, any Person resulting from any consolidation to
which any new warrant agent shall be a party or any Person to which any new warrant agent transfers
substantially all of its corporate trust or shareholders 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.



     16. Miscellaneous.



          (a) This Warrant may not be assigned by the Holder except to a Permitted Transferee. This
Warrant may not be assigned by the Company, except to a successor in the event of a Fundamental
Transaction. This Warrant shall be binding on and inure to the benefit of the parties hereto and
their respective permitted successors and assigns. Subject to the preceding sentence, 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. This Warrant may be
amended only in writing signed by the Company and the Holder and their permitted successors and
assigns.




          (b) The Company will not, by amendment of its governing documents or through 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 will 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 in order to
protect the rights of the Holder against impairment. Without limiting the generality of the
foregoing, the Company (i) will not increase the par value of any Warrant Shares above the amount
payable therefor upon exercise thereof, and (ii) will take all such action as may be reasonably
necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares on the exercise of this Warrant, free from all taxes, liens, claims
and encumbrances and (iii) will not close its shareholder books or records in any manner which
interferes with the timely exercise of this Warrant.




          (c) This Warrant shall be governed by and construed and enforced in accordance with the laws
of the Commonwealth of Massachusetts. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and Federal courts sitting in the City of Boston, Massachusetts, for the
adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding that it is not personally subject to the jurisdiction of any such
court or that such suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it under this Warrant
and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. THE PARTIES HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.




          (d) Neither party shall be deemed in default of any provision of this Warrant, to the extent
that performance of its obligations or attempts to cure a breach hereof are delayed or prevented by
any event reasonably beyond the control of such party, including, without limitation, war,
hostilities, acts of terrorism, revolution, riot, civil commotion, national emergency, strike,
lockout, unavailability of supplies, epidemic, fire, flood, earthquake, force of nature, explosion,
embargo, or any other Act of God, or any law, proclamation, regulation, ordinance, or other act or
order of any court, government or governmental agency, provided that such party gives the other
party written notice thereof promptly upon discovery thereof and uses reasonable efforts to cure or
mitigate the delay or failure to perform.




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




          (f) In case any one or more of the provisions of this Warrant shall be deemed invalid or
unenforceable in any respect, the validity and enforceability of the remaining terms and provisions
of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt
in good faith to agree upon a valid and enforceable provision which shall be a commercially
reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision
in this Warrant.




[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]




 









 





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




	 	 	 	 	 
	 	RXI PHARMACEUTICALS CORPORATION

 	 
	 	By:  	/s/ Tod Woolf
 	 
	 	 	Name:  	Tod Woolf 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 




 









 








APPENDIX A




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 within Warrant to purchase
_____________________ shares
of Common Stock of RXi Pharmaceuticals Corporation to which the
within warrant relates and appoints __________________________
 attorney to transfer said right on the books of RXi Pharmaceuticals
Corporation with full power of substitution in the premises.



	 	 	 	 	 
	Dated:                     
	 	 	 	 
	 

	 	 	 	 
	 

	 	(Signature must conform in all respects to
name of Holder as specified on face of the
Warrant)	 	 
	 
	 	 	 	 
	 

	 	Address of Transferee:
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	In the presence of:
	 	 	 	 
	 
	 	 	 	 
	                                        
	 	 	 	 







 









 








APPENDIX B




FORM OF EXERCISE NOTICE



(To be executed by the Holder to exercise the right to purchase shares of Common Stock under the
foregoing Warrant)



To: RXi Pharmaceuticals Corporation



The undersigned is the Holder of Warrant No. [                    ] (the “Warrant”) issued by RXi
Pharmaceuticals Corporation, a Delaware corporation (the “Company”). Capitalized terms used herein
and not otherwise defined have the respective meanings set forth in the Warrant.





	 	1.	 	The Warrant is currently exercisable to purchase a total of                      Warrant
Shares.
	 
	 	2.	 	The undersigned Holder hereby exercises its right to purchase                      Warrant
Shares pursuant to the Warrant.
	 
	 	3.	 	The Holder intends that payment of the Exercise Price shall be made as:






	 	a.	 	A “Cash Exercise” with respect to                      Warrant
Shares; and/or
	 
	 	b.	 	A “Cashless Exercise” with respect to                     
Warrant Shares.






	 	4.	 	In the event that the Holder has elected a Cash Exercise with respect to some
or all of the Warrant Shares to be issued pursuant hereto, the Holder shall pay the sum
of $                     to the Company in accordance with the terms of the Warrant.
	 
	 	5.	 	Pursuant to this exercise, the Company shall deliver to the Holder                     
Warrant Shares in accordance with the terms of the Warrant
	 
	 	6.	 	Following this exercise, the Warrant shall be exercisable to purchase a total
of                      Warrant Shares.





	 	 	 	 	 
	Dated:                     

	 	Name of Holder:	 	 
	 
	 	 	 	 
	 

	 	(Print)
 
	 	 
	 
	 	 	 	 
	 

	 	By:
 

	 	 
	 
	 	 	 	 
	 

	 	Title:
 
	 	 
	 
	 	 	 	 
	 

	 	(Signature must conform in all respects to
name of Holder as specified on face of the
Warrant)