exv10w2






Exhibit 10.2




REGISTRATION RIGHTS AGREEMENT




     REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of the 30th day of January
2009 (this “Agreement”) between YA GLOBAL MASTER SPV LTD., a Cayman Islands exempt limited
partnership (the “Investor”), and RXI PHARMACEUTICALS CORPORATION, a corporation organized
and existing under the laws of the State of Delaware (the “Company”).



     WHEREAS:



     A. In connection with the Standby Equity Distribution Agreement by and between the parties
hereto of even date herewith (the “Standby Equity Distribution Agreement”), the Company has
agreed, upon the terms and subject to the conditions of the Standby Equity Distribution Agreement,
to issue and sell to the Investor that number of shares of the Company’s common stock, par value
$0.0001 per share (the “Common Stock”), which can be purchased pursuant to the terms of the
Standby Equity Distribution Agreement for an aggregate purchase price of up to $25,000,000.
Capitalized terms not defined herein shall have the meaning ascribed to them in the Standby Equity
Distribution Agreement.



     B. To induce the Investor to execute and deliver the Standby Equity Distribution Agreement,
the Company has agreed to provide certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar successor statute (collectively,
the “Securities Act”), and applicable state securities laws.



     NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Investor hereby agree as follows:



     1. DEFINITIONS.



               a. As used in this Agreement, the following terms shall have the meanings listed below, and
any capitalized terms used but not defined herein shall have the meaning set forth in the Standby
Equity Distribution Agreement:



               b. “Commitment Period” has the meaning given thereto in the Standby Equity
Distribution Agreement.



               c. “Person” means a corporation, a limited liability company, an association, a
partnership, an organization, a business, an individual, a governmental or political subdivision
thereof or a governmental agency.



               d. “Prospectus” means the prospectus included in a Registration Statement (including,
without limitation, a prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A promulgated under
the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by a Registration
Statement, and all other amendments and supplements to the



 









 







Prospectus, including post-effective amendments, and all material incorporated by reference or
deemed to be incorporated by reference in such Prospectus.



               e. “Registrable Securities” means (i) the shares of Common Stock that are or may be
purchased by the Investor pursuant to the Standby Equity Distribution Agreement, (ii) the
Investor’s Shares, and (iii) any securities issued or issuable with respect to any of the foregoing
by way of exchange, stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise. As to any particular
Registrable Securities, once issued such securities shall cease to be Registrable Securities when
(a) the Registration Statement has been declared effective by the Commission and such Registrable
Securities have been disposed of pursuant to the Registration Statement, (b) such Registrable
Securities have been sold under circumstances under which all of the applicable conditions of
Rule 144 (or any similar provision then in force) under the Securities Act (“Rule 144”) are met, or
(c) in the opinion of counsel to the Company such Registrable Securities may permanently be sold
without registration and without any time, volume or manner limitations pursuant to Rule 144.



               f. “Registration Statement” means the registration statements required to be filed
hereunder and any additional registration statements contemplated by Section 2 hereof, including
(in each case) the Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference in such registration statement.



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



     2. REGISTRATION.



               a. Filing of a Registration Statement. The Company shall prepare and file with the
SEC a Registration Statement, or multiple Registration Statements, on Form S-1 or Form S-3 (if
eligible) for the resale by the Investor of the Registrable Securities. The Company in its sole
discretion may chose which Form on which and when to file such Registration Statements, provided
however, pursuant to the Standby Equity Distribution Agreement the Company shall not have the
ability to make any Advances until the effectiveness of a Registration Statement. Each
Registration Statement shall contain the “Plan of Distribution” section in substantially
the form attached hereto as Exhibit A.



               b. Maintaining a Registration Statement. The Company shall cause any Registration
Statement that has been declared effective to remain effective at all times until all Registrable
Securities contained in such Registration Statement cease to be Registrable Securities (the
“Registration Period”). Each Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or necessary to make
the statements therein, in light of the circumstances in which they were made, not misleading.



 









 





               c. Filing Procedures. Prior to the filing of any Registration Statement with the SEC,
the Company shall furnish a draft of such Registration Statement to the Investor for its review and
comment. The Investor shall furnish comments on a Registration Statement to the Company within 24
hours of the receipt thereof.



     3. RELATED OBLIGATIONS.



               a. The Company shall, not less than three business days prior to the filing of a Registration
Statement and not less than one business day prior to the filing of any related amendments and
supplements to all Registration Statements (except for any amendments or supplements caused by the
filing of any annual reports on Form 10-K, quarterly reports on 10-Q and any periodic reports on
Form 8-K), furnish to the Investor copies of all such documents proposed to be filed, which
documents (other than those incorporated or deemed to be incorporated by reference) will be subject
to the reasonable and prompt review of the Investor.



               b. The Company shall (i) prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the Prospectus used in
connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the Securities Act, as may be necessary to keep such Registration Statement
effective at all times during the Registration Period, and prepare and file with the SEC such
additional Registration Statements in order to register for resale under the Securities Act all of
the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any
required Prospectus supplement (subject to the terms of this Agreement), and as so supplemented or
amended to be filed pursuant to Rule 424; (iii) provide the Investor copies of all correspondence
from and to the SEC relating to a Registration Statement (provided that the Company may excise any
information contained therein which would constitute material non-public information, and (iv)
comply with the provisions of the Securities Act with respect to the disposition of all Registrable
Securities of the Company covered by such Registration Statement until such time as all of such
Registrable Securities shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration Statement. In the
case of amendments and supplements to a Registration Statement which are required to be filed
pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company’s
filing a report on Form 10-K, Form 10-Q, or Form 8-K or any analogous report under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), the Company shall incorporate such
report by reference into the Registration Statement, if applicable, or shall file such amendments
or supplements with the SEC either on the day on which the Exchange Act report is filed which
created the requirement for the Company to amend or supplement the Registration Statement, if
feasible, or otherwise promptly thereafter.



               c. The Company shall furnish to the Investor without charge, (i) at least one copy of such
Registration Statement as declared effective by the SEC and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by reference, all exhibits
and each preliminary prospectus, (ii) at the request of the Investor, 10 copies of the final
prospectus included in such Registration Statement and all amendments and supplements thereto (or
such other number of copies as the Investor may reasonably request) and (iii) such other documents
as the Investor may reasonably request from



 









 







time to time in order to facilitate the disposition of the Registrable Securities owned by the
Investor.



               d. The Company shall use its best efforts to (i) register and qualify the Registrable
Securities covered by a Registration Statement under such other securities or “blue sky” laws of
such jurisdictions in the United States as the Investor reasonably requests, (ii) prepare and file
in those jurisdictions, such amendments (including post-effective amendments) and supplements to
such registrations and qualifications as may be necessary to maintain the effectiveness thereof
during the Registration Period, (iii) take such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the Registrable Securities for
sale in such jurisdictions; provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (w) make any change to its certificate of incorporation or
by-laws, (x) qualify to do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d), (y) subject itself to general taxation in any such jurisdiction,
or (z) file a general consent to service of process in any such jurisdiction. The Company shall
promptly notify the Investor of the receipt by the Company of any notification with respect to the
suspension of the registration or qualification of any of the Registrable Securities for sale under
the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual
notice of the initiation or threat of any proceeding for such purpose.



               e. As promptly as practicable after becoming aware of such event or development, the Company
shall notify the Investor in writing of the happening of any event as a result of which the
prospectus included in a Registration Statement, as then in effect, includes an untrue statement of
a material fact or omission to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any material, nonpublic
information), and promptly prepare a supplement or amendment to such Registration Statement to
correct such untrue statement or omission, and deliver 10 copies of such supplement or amendment to
the Investor. The Investor agrees to not consummate any transactions related to the shares of the
Company’s Common Stock upon receipt of such notice, until the Company subsequently notifies the
Investor in writing (which shall be delivered promptly) (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and when a Registration Statement or any
post-effective amendment has become effective (notification of such effectiveness shall be
delivered to the Investor by facsimile on the same day of such effectiveness), (ii) of any request
by the SEC for amendments or supplements to a Registration Statement or related prospectus or
related information, and (iii) of the Company’s reasonable determination that a post-effective
amendment to a Registration Statement would be appropriate.



               f. The Company shall use its best efforts to prevent the issuance of any stop order or other
suspension of effectiveness of a Registration Statement, or the suspension of the qualification of
any of the Registrable Securities for sale in any jurisdiction within the United States of America
and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension
at the earliest possible moment and to notify the Investor of the



 









 







issuance of such order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.



               g. If, after the execution of this Agreement, the Investor believes, after consultation with
its legal counsel, that it could reasonably be deemed to be an underwriter of Registrable
Securities, at the request of the Investor, the Company shall furnish to the Investor, on the date
of the effectiveness of the Registration Statement and thereafter from time to time on such dates
as the Investor may reasonably request (i) a letter, dated such date, from the Company’s
independent certified public accountants in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten public offering, and
(ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily given in an underwritten
public offering, addressed to the Investor.



               h. If, after the execution of this Agreement, the Investor believes, after consultation with
its legal counsel, that it could reasonably be deemed to be an underwriter of Registrable
Securities, at the request of the Investor, the Company shall make available for inspection by (i)
the Investor and (ii) one firm of accountants or other agents retained by the Investor
(collectively, the “Inspectors”) all pertinent financial and other records, and pertinent
corporate documents and properties of the Company (collectively, the “Records”), as shall
be reasonably deemed necessary by each Inspector, and cause the Company’s officers, directors and
employees to supply all information which any Inspector may reasonably request; provided, however,
that each Inspector shall agree, and the Investor hereby agrees, to hold in strict confidence and
shall not make any disclosure (except to an Investor) or use any Record or other information which
the Company determines in good faith to be confidential, and of which determination the Inspectors
are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement or is otherwise required under the
Securities Act, (b) the release of such Records is ordered pursuant to a final, non-appealable
subpoena or order from a court or government body of competent jurisdiction, or (c) the information
in such Records has been made generally available to the public other than by disclosure in
violation of this or any other agreement of which the Inspector and the Investor has knowledge.
The Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by
a court or governmental body of competent jurisdiction or through other means, give prompt notice
to the Company and allow the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed confidential.



               i. The Company shall hold in confidence and not make any disclosure of information concerning
the Investor provided to the Company unless (i) disclosure of such information is necessary to
comply with federal or state securities laws, (ii) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final, non-appealable order from a
court or governmental body of competent jurisdiction, or (iv) such information has been made
generally available to the public other than by disclosure in violation of this Agreement or any
other agreement. The Company agrees that it shall, upon learning that disclosure of such
information concerning the Investor is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt written notice



 









 







to the Investor and allow the Investor, at the Investor’s expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for, such information.



               j. The Company shall use its best efforts either to cause all the Registrable Securities
covered by a Registration Statement (i) to be listed on each securities exchange on which
securities of the same class or series issued by the Company are then listed, if any, if the
listing of such Registrable Securities is then permitted under the rules of such exchange or to
secure the inclusion for quotation on the Financial Industry Regulatory Authority’s OTC Bulletin
Board for such Registrable Securities. The Company shall pay all fees and expenses in connection
with satisfying its obligation under this Section 3(j).



               k. The Company shall cooperate with the Investor, to the extent applicable, to facilitate the
timely preparation and delivery of certificates (not bearing any restrictive legend) representing
the Registrable Securities to be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the Investor may
reasonably request and registered in such names as the Investor may request.



               l. The Company shall use its best efforts to cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or approved by such other governmental
agencies or authorities as may be necessary to consummate the disposition of such Registrable
Securities.



               m. The Company shall otherwise use its best efforts to comply with all applicable rules and
regulations of the SEC in connection with any registration hereunder.



               n. Within 2 business days after a Registration Statement which covers Registrable Securities
is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel for the
Company to deliver, to the transfer agent for such Registrable Securities (with copies to the
Investor) confirmation that such Registration Statement has been declared effective by the SEC in
the form attached hereto as Exhibit B.



               o. The Company shall take all other reasonable actions necessary to expedite and facilitate
disposition by the Investor of Registrable Securities pursuant to a Registration Statement.



     4. OBLIGATIONS OF THE INVESTOR.



          a. The Investor agrees that, upon receipt of any notice from the Company of the (i) the
happening of any event, following which the prospectus included in a Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or (ii) the issuance of any stop order or
other suspension of effectiveness of a Registration Statement, or the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction within the United
States of America, the Investor will immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement(s) covering such Registrable Securities until the Investor’s
receipt of written notice from the Company indicating that such event has been



 









 






cured and confirming that re-sales may be made pursuant to such Registration Statement.
Notwithstanding anything to the contrary, the Company shall deliver, or shall cause its transfer
agent to deliver, unlegended certificates for shares of Common Stock to the Investor in accordance
with the terms of the Standby Equity Distribution Agreement in connection with any sale of
Registrable Securities with respect to which the Investor has consummated such sale prior to the
Investor’s receipt of a notice from the Company described in this section and for which the
Investor has not yet settled.




          b. The Investor covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it or an exemption therefrom in connection with
sales of Registrable Securities pursuant to the Registration Statement.




     5. EXPENSES OF REGISTRATION.



     All expenses incurred in connection with registrations, filings or qualifications pursuant to
Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees,
printers, legal and accounting fees shall be paid by the Company.



     6. INDEMNIFICATION.



     With respect to Registrable Securities which are included in a Registration Statement under
this Agreement:



               a. To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold
harmless and defend the Investor, the directors, officers, partners, employees, agents,
representatives of, and each Person, if any, who controls the Investor within the meaning of the
Securities Act or the Exchange Act (each, an “Indemnified Person”), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’
fees, amounts paid in settlement or expenses, joint or several (collectively, “Claims”)
incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding,
investigation or appeal taken from the foregoing by or before any court or governmental,
administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether
or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which
any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of a material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the qualification of the offering under
the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are
offered (“Blue Sky Filing”), or the omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not misleading; (ii) any
untrue statement or alleged untrue statement of a material fact contained in any final prospectus
(as amended or supplemented, if the Company files any amendment thereof or supplement thereto with
the SEC) or the omission or alleged omission to state therein any material fact necessary to make
the statements made therein, in light of the circumstances under which the statements therein were
made, not misleading; or (iii) any violation or alleged violation by the Company of the Securities
Act, the Exchange Act, any other law, including, without limitation, any state securities law, or
any rule or regulation there under relating to the



 









 







offer or sale of the Registrable Securities pursuant to a Registration Statement (the matters
in the foregoing clauses (i) through (iii) being, collectively, “Violations”). The Company
shall reimburse the Investor and each such controlling person promptly as such expenses are
incurred and are due and payable, for any legal fees or disbursements or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement contained in this Section
6(a): (x) shall not apply to a Claim by an Indemnified Person arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information furnished in writing to
the Company by such Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto; (y) shall not be
available to the extent such Claim is based on a failure of the Investor to deliver or to cause to
be delivered the prospectus made available by the Company, if such prospectus was timely made
available by the Company pursuant to Section 3(e), or if the Shares are sold by the Investor in
violation of the terms of this Agreement; and (z) shall not apply to amounts paid in settlement of
any Claim if such settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Person and shall survive
the transfer of the Registrable Securities by the Investor.



               b. In connection with a Registration Statement, the Investor agrees to indemnify, hold
harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the
Company, each of its directors, each of its officers who signs the Registration Statement and each
Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange
Act (each an “Indemnified Party”), against any Claim or Indemnified Damages to which any of
them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such
Claim or Indemnified Damages arise out of or is based upon any Violation, in each case to the
extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with
written information furnished to the Company by the Investor expressly for use in connection with
such Registration Statement; and, subject to Section 6(d), the Investor will reimburse any legal or
other expenses reasonably incurred by them in connection with investigating or defending any such
Claim; provided, however, that the indemnity agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written consent of the
Investor, which consent shall not be unreasonably withheld; provided, further, however, that the
Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified
Damages as does not exceed the net proceeds to the Investor as a result of the sale of Registrable
Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Investor. Notwithstanding anything to
the contrary contained herein, the indemnification agreement contained in this Section 6(b) with
respect to any prospectus shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact contained in the prospectus was corrected and such new
prospectus was delivered to the Investor prior to the Investor’s use of the prospectus to which the
Claim relates.



 









 





               c. Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6
of notice of the commencement of any action or proceeding (including any governmental action or
proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice 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 control of the defense thereof with
counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the
Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified
Party shall have the right to retain its own counsel with the fees and expenses of not more than
one counsel for such Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by
such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such proceeding. The
Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or claim by the indemnifying party
and shall furnish to the indemnifying party all information reasonably available to the Indemnified
Party or Indemnified Person which relates to such action or claim. The indemnifying party shall
keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of
the defense or any settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without its prior written
consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or
condition its consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all
liability in respect to such claim or litigation. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or corporations relating to the matter
for which indemnification has been made. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified Party under this
Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend
such action.



               d. The indemnification required by this Section 6 shall be made by periodic payments of the
amount thereof during the course of the investigation or defense, as and when bills are received or
Indemnified Damages are incurred.



               e. The indemnity agreements contained herein shall be in addition to (i) any cause of action
or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or
others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.



 









 





     7. CONTRIBUTION.



     To the extent any indemnification by an indemnifying party is prohibited or limited by law,
the indemnifying party agrees to make the maximum contribution with respect to any amounts for
which it would otherwise be liable under Section 6 to the fullest extent permitted by law;
provided, however, that: (i) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited
in amount to the net amount of proceeds received by such seller from the sale of such Registrable
Securities.



     8. REPORTS UNDER THE EXCHANGE ACT.



     With a view to making available to the Investor the benefits of Rule 144 promulgated under the
Securities Act or any similar rule or regulation of the SEC that may at any time permit the
Investor to sell securities of the Company to the public without registration (“Rule 144”)
the Company agrees to:



               a. make and keep public information available, as those terms are understood and defined in
Rule 144;



               b. file with the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act so long as the Company remains subject to
such requirements (it being understood that nothing herein shall limit the Company’s obligations
under Section 6.03 of the Standby Equity Distribution Agreement) and the filing of such reports and
other documents is required for the applicable provisions of Rule 144; and



               c. furnish to the Investor so long as the Investor owns Registrable Securities, promptly upon
request, (i) a written statement by the Company that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to permit the Investor to
sell such securities pursuant to Rule 144 without registration.



     9. AMENDMENT OF REGISTRATION RIGHTS.



     Provisions of this Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or prospectively), only by a written
agreement between the Company and the Investor. Any amendment or waiver effected in accordance
with this Section 9 shall be binding upon the Investor and the Company. No consideration shall be
offered or paid to any Person to amend or consent to a waiver or modification of any provision of
any of this Agreement unless the same consideration also is offered to all of the parties to this
Agreement.




 











 





     10. MISCELLANEOUS.



               a. A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is
deemed to own of record such Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or election received from
the registered owner of such Registrable Securities.



               b. Any notices, consents, waivers or other communications required or permitted to be given
under the terms of this Agreement must be in writing and will be deemed to have been delivered:
(i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one business day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be:



	 	 	 
	If to the Company, to:

	 	RXi Pharmaceuticals Corporation
	 

	 	60 Prescott Street
	 

	 	Worcester, MA 01605
	 

	 	Attention:    Chief Financial Officer
	 

	 	Telephone:   (508) 767-3861
	 

	 	Facsimile:    (508) 767-3862
	 
	 	 
	With a copy to:

	 	Ropes & Gray LLP
	 

	 	One International Place
	 

	 	Boston, MA 02110
	 

	 	Attention:    Marc Rubenstein, Esq.
	 

	 	Telephone:   (617) 951-7000
	 

	 	Facsimile:    (617) 951-7010
	 
	 	 
	If to the Investor, to:

	 	YA Global Master SPV Ltd.
	 

	 	101 Hudson Street – Suite 3700
	 

	 	Jersey City, New Jersey 07302
	 

	 	Attention:    Mark Angelo
	 

	 	        
            Portfolio Manager
	 

	 	Telephone:   (201) 985-8300
	 

	 	Facsimile:     (201) 985-8266
	 
	 	 
	With a copy to:

	 	David Gonzalez, Esq.
	 

	 	Yorkville Advisors, LLC
	 

	 	101 Hudson Street – Suite 3700
	 

	 	Jersey City, NJ 07302
	 

	 	Telephone:    (201) 985-8300
	 

	 	Facsimile:     (201) 985-8266






 









 





Any party may change its address by providing written notice to the other parties hereto at least
five days prior to the effectiveness of such change. Written confirmation of receipt (A) given by
the recipient of such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C) provided by a courier
or overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.




               c. Failure of any party to exercise any right or remedy under this Agreement or otherwise, or
delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.



               d. The corporate laws of the State of Delaware shall govern all issues concerning the relative
rights of the Company and the Investor. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the internal laws of the
State of New Jersey, without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of New Jersey or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New Jersey. Each party hereby
irrevocably submits to the non-exclusive jurisdiction of the Superior Courts of the State of New
Jersey, sitting in Hudson County, New Jersey and the Federal District Court for the District of New
Jersey sitting in Newark, New Jersey, 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, any claim that it
is not personally subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of 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 to such party
at the address for such notices to it under this Agreement 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. If
any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or enforceability of the remainder of
this Agreement in that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE,
AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.



               e. This Agreement shall inure to the benefit of and be binding upon the permitted successors
and assigns of each of the parties hereto.



               f. The headings in this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.



 









 





               g. This Agreement may be executed in identical counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same agreement. This Agreement, once
executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this Agreement.



               h. Each party shall do and perform, or cause to be done and performed, all such further acts
and things, and shall execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.



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



               j. This Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




 









 








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



	 	 	 	 	 	 	 
	 	 	RXi Pharmaceuticals Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Tod Woolf
 

	 	 
	 

	 	Name:
	 	Tod Woolf	 	 
	 

	 	Title:
	 	President & CEO	 	 
	 
	 	 	 	 	 	 
	 	 	YA Global Master SPV Ltd.	 	 
	 
	 	 	 	 	 	 
	 	 	By:  Yorkville Advisors, LLC	 	 
	 	 	Its:  Investment Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David Gonzalez
 

	 	 
	 

	 	Name:
	 	David Gonzalez	 	 
	 

	 	Title:
	 	Member & General Counsel	 	 







 









 








EXHIBIT A




PLAN OF DISTRIBUTION




     Each Selling Stockholder (the “Selling Stockholders”) of the common stock and any of
their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of
their shares of common stock on the                      or any other stock exchange, market or trading
facility on which the shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. A Selling Stockholder may use any one or more of the following methods when
selling shares:




	 	•	 	ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
	 
	 	•	 	block trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate the
transaction;
	 
	 	•	 	purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;
	 
	 	•	 	an exchange distribution in accordance with the rules of the applicable
exchange;
	 
	 	•	 	privately negotiated transactions;
	 
	 	•	 	broker-dealers may agree with the Selling Stockholders to sell a specified
number of such shares at a stipulated price per share;
	 
	 	•	 	through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;
	 
	 	•	 	a combination of any such methods of sale; or
	 
	 	•	 	any other method permitted pursuant to applicable law.





     The Selling Stockholders may also sell shares under Rule 144 under the Securities Act of 1933,
as amended (the “Securities Act”), if available, rather than under this prospectus.



     Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the Selling
Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this
Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission
in compliance with NASDR Rule 2440; and in the case of a principal transaction a markup or markdown
in compliance with NASDR IM-2440.



 









 





     In connection with the sale of the common stock or interests therein, the Selling Stockholders
may enter into hedging transactions with broker-dealers or other financial institutions, which may
in turn engage in short sales of the Common Stock in the course of hedging the positions they
assume. The Selling Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more derivative securities
which require the delivery to such broker-dealer or other financial institution of shares offered
by this prospectus, which shares such broker-dealer or other financial institution may resell
pursuant to this prospectus (as supplemented or amended to reflect such transaction).



     The Selling Stockholders and any broker-dealers or agents that are involved in selling the
shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act. Each Selling Stockholder has informed the Company that it
does not have any written or oral agreement or understanding, directly or indirectly, with any
person to distribute the Common Stock. In no event shall any broker-dealer receive fees,
commissions and markups which, in the aggregate, would exceed eight percent (8%).



     The Company is required to pay certain fees and expenses incurred by the Company incident to
the registration of the shares. The Company has agreed to indemnify the Selling Stockholders
against certain losses, claims, damages and liabilities, including liabilities under the Securities
Act.



     Because Selling Stockholders may be deemed to be “underwriters” within the meaning of the
Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act
including Rule 172 thereunder. In addition, any securities covered by this prospectus which
qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather
than under this prospectus. There is no underwriter or coordinating broker acting in connection
with the proposed sale of the resale shares by the Selling Stockholders.



     We agreed to keep this prospectus effective until the earlier of (i) the date on which the
shares may be resold by the Selling Stockholders without registration and without regard to any
volume limitations by reason of Rule 144 under the Securities Act or any other rule of similar
effect or (ii) all of the shares have been sold pursuant to this prospectus or Rule 144 under the
Securities Act or any other rule of similar effect. The resale shares will be sold only through
registered or licensed brokers or dealers if required under applicable state securities laws. In
addition, in certain states, the resale shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.



     Under applicable rules and regulations under the Exchange Act, any person engaged in the
distribution of the resale shares may not simultaneously engage in market making activities with
respect to the common stock for the applicable restricted period, as defined in Regulation M, prior
to the commencement of the distribution. In addition, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations thereunder,



 









 







including Regulation M, which may limit the timing of purchases and sales of shares of the
common stock by the Selling Stockholders or any other person. We will make copies of this
prospectus available to the Selling Stockholders and have informed them of the need to deliver a
copy of this prospectus to each purchaser at or prior to the time of the sale (including by
compliance with Rule 172 under the Securities Act).



 









 





EXHIBIT B

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT




Attention:




          Re: RXI PHARMACEUTICALS CORPORATION




Ladies and Gentlemen:



     We are counsel to RXi Pharmaceuticals Corporation (the “Company”), and have
represented the Company in connection with that certain Standby Equity Distribution Agreement (the
“Standby Equity Distribution Agreement”) entered into by and between the Company and YA
Global Master SPV Ltd. (the “Investor”) pursuant to which the Company issued to the
Investor shares of its Common Stock, par value $0.0001 per share (the “Common Stock”).
Pursuant to the Standby Equity Distribution Agreement, the Company also has entered into a
Registration Rights Agreement with the Investor (the “Registration Rights Agreement”)
pursuant to which the Company agreed, among other things, to register the Registrable Securities
(as defined in the Registration Rights Agreement) under the Securities Act of 1933, as amended (the
“Securities Act”). In connection with the Company’s obligations under the Registration
Rights Agreement, on                      ___, the Company filed a Registration Statement on Form                     
(File No. 333-                    ) (the “Registration Statement”) with the Securities and
Exchange Commission (the “SEC”) relating to the Registrable Securities which names the
Investor as a selling stockholder thereunder.



     In connection with the foregoing, we advise you that a member of the SEC’s staff has advised
us by telephone that the SEC has entered an order declaring the Registration Statement effective
under the Securities Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we
have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that purpose are pending
before, or threatened by, the SEC and the Registrable Securities are available for resale under the
Securities Act pursuant to the Registration Statement.



	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 






cc:  YA Global Master SPV Ltd.