Document:

Securities Purchase Agreement, dated August 21, 2003

 EXHIBIT 10.75 
  
 SECURITIES PURCHASE AGREEMENT 
  

This Securities Purchase Agreement (this “Agreement”) is dated as of August 21, 2003, by and among Cortex Pharmaceuticals, Inc., a
Delaware corporation (the “Company”), and the purchasers identified on the signature pages hereto (each a “Purchaser” and collectively the “Purchasers”); and 
  
 WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(2) of the Securities Act (as defined below), and Rule 506 promulgated thereunder, the Company desires to issue and sell to the Purchasers, and the Purchasers, severally and not jointly, desire to purchase from the Company in
the aggregate, up to 3,400,000 shares of Common Stock and Warrants to purchase up to 3,400,000 shares of Common Stock. 
  
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows: 
  
 ARTICLE I. 
 DEFINITIONS 
  
 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement,
the following terms have the meanings indicated in this Section 1.1: 
  
 “Action” shall have the meaning ascribed to such term in Section 3.1(j). 
  
 “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled
by or is under common control with a Person as such terms are used in and construed under Rule 144. With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such
Purchaser will be deemed to be an Affiliate of such Purchaser. 
  
 “Business Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday or a day on which banking institutions in the State of New York are authorized or required by
law or other governmental action to close. 
  
 “Closing” means the closing of the purchase and sale of the Shares and the Warrants pursuant to Section 2.1. 
  
 “Closing Date” means the date of the Closing, which shall be the date hereof. 
  
 “Closing Price” means on any particular
date (a) the last reported closing bid price per share of Common Stock on such date on the Trading Market (as reported by Bloomberg L.P. at 4:15 PM (New York time) as the last reported closing bid price for regular session trading on such day), or
(b) if there is no such price on such date, then the closing bid price on the Trading Market on the date nearest preceding such date (as reported by Bloomberg L.P. at 4:15 PM (New York time) as the closing bid price for regular session trading on
such day), or (c) if the Common Stock is not then listed or 
  

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quoted on the Trading Market and if prices for the Common Stock are then reported in the “pink sheets” published by the Pink Sheets LLC (formerly
the National Quotation Bureau Incorporated) (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) if the shares of Common Stock are not then
publicly traded the fair market value of a share of Common Stock as determined by an appraiser selected in good faith by the Purchasers of a majority in interest of the Shares and reasonably acceptable to the Company. 
  
 “Commission” means the Securities and
Exchange Commission. 
  
 “Common
Stock” means the common stock of the Company, $0.001 par value per share, and any securities into which such common stock may hereafter be reclassified. 
  
 “Common Stock Equivalents” means any securities of the Company or its Subsidiaries which
would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise
entitles the holder thereof to receive, Common Stock. 
  
 “Company Counsel” means Stradling Yocca Carlson & Rauth, P.C. 
  
 “Disclosure Schedules” means the Disclosure Schedules attached as Annex I hereto. 
  
 “Effective Date” means the date that the
Registration Statement is first declared effective by the Commission. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(o). 
  
 “Liens” means a lien, charge, security
interest, encumbrance, right of first refusal or other restriction. 
  
 “Major Purchasers” means the original Purchasers on the Closing Date holding, on the date of determination, at least 50,000 Shares, subject to adjustment for reverse and forward stock splits, stock
dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement and subsequent assignees holding, on the date of determination, at least 250,000 Shares, subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement. 
  

“Material Adverse Effect” shall have the meaning ascribed to such term in Section 3.1(b). 
  

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 “Material Permits” shall have the meaning ascribed to such term in
Section 3.1(m). 
  
 “Per Unit Purchase
Price” equals $1.50, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement and before the Closing.

  
 “Person” means an individual
or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 
  
 “Registration Statement” means a
registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Purchasers of the Shares and the Warrant Shares. 
  
 “Registration Rights Agreement” means the Registration Rights Agreement, dated as of the
date of this Agreement, among the Company and each Purchaser, in the form of Exhibit A hereto. 
  
 “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h). 
  
 “Securities” means the Shares, the Warrants
and the Warrant Shares. 
  
 “Securities
Act” means the Securities Act of 1933, as amended. 
  
 “Shares” means an aggregate of up to 3,400,000 shares of Common Stock, which are being issued and sold by the Company to the Purchasers at the Closing. 
  
 “Subscription Amount” means, as to each
Purchaser and the Closing, the amounts set forth below such Purchaser’s signature block on the signature page hereto, in United States dollars and in immediately available funds. 
  
 “Subsidiary” means any Person in which the Company, directly or indirectly, owns capital
stock or holds an equity or similar interest. 
  
 “Trading Day” means (i) a day on which the Common Stock is traded on a Trading Market, or (ii) if the Common Stock is not listed on a Trading Market, a day on which the Common Stock is traded on the over-the-counter market,
as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the “pink sheets” published by the Pink Sheets LLC (formerly the National Quotation
Bureau Incorporated) (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day
shall mean a Business Day. 
  

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 “Trading Market” means the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap Market. 
  
 “Transaction Documents” means this Agreement, the Registration Rights Agreement, the
Warrant and any other documents or agreements executed in connection with the transactions contemplated hereunder. 
  
 “Unit” means a Share and a Warrant to purchase one share of Common Stock. 
  
 “Warrants” means an aggregate of up to
3,400,000 Common Stock purchase warrants, in the form of Exhibit C, issuable to the Purchasers at Closing, which warrants shall be exercisable immediately and have an exercise price equal to $2.55 and a term of exercise of 5 years.

  
 “Warrant Shares” means the
shares of Common Stock issuable upon exercise of the Warrants. 
  
 ARTICLE II. 
 PURCHASE AND SALE 
  
 2.1 Closing. At the Closing, each Purchaser shall purchase, severally and not jointly, and the Company shall issue and sell, to each Purchaser such
number of Units set forth opposite such Purchaser’s name on Schedule A hereto at the Per Unit Purchase Price. Upon satisfaction of the conditions set forth in Section 2.2, the Closing shall occur at the offices of Feldman Weinstein LLP, or such
other location as the parties shall mutually agree. Notwithstanding the foregoing, in no event will the Closing occur unless and until the Company has received an aggregate Subscription Amount of at least $3,000,000 in accordance with Section
2.2(b)(ii). 
  
 2.2 Closing Conditions. 
  
 (a) At the Closing the Company shall deliver or cause to be
delivered to each Purchaser (except as otherwise provided below): 
  
 (i) this Agreement duly executed by the Company; 
  
 (ii) on or prior to August 29, 2003, one or more stock certificates, registered in the name of such Purchaser free and clear of all
restrictive and other legends (except as expressly provided in Section 4.1(b) hereof), evidencing such number of Shares equal to the number Units set forth opposite such Purchaser’s name on Schedule A hereto, registered in the
name of such Purchaser; 
  
 (iii) on or prior to
August 29, 2003, a Warrant, registered in the name of such Purchaser, pursuant to which such Purchaser shall have the right to acquire up to the number of shares of Common Stock equal to the number of Units set forth opposite such Purchaser’s
name on Schedule A hereto; 
  

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 (iv) the Registration Rights Agreement duly executed by the Company; and 
  
 (v) a legal opinion of Company Counsel, in the form of
Exhibit B attached hereto. 
  
 (b) At the
Closing each Purchaser shall deliver or cause to be delivered to the Company the following: 
  
 (i) this Agreement duly executed by such Purchaser; 
  
 (ii) such Purchaser’s Subscription Amount as to such Closing by wire transfer to the account of the
Company as provided to the Purchasers in writing prior to the Closing Date; and 
  
 (iii) the Registration Rights Agreement duly executed by such Purchaser. 
  
 (c) All representations and warranties of the other party contained herein shall remain true and correct as
of the Closing Date (except for representations and warranties that speak as of a specific date, which representations and warranties must be correct as of such date), and each party shall have performed and complied in all material respects with
the covenants and conditions required by this Agreement to be performed or complied with by the party at or prior to the Closing. 
  
 (d) As of the Closing Date, there shall have been no Material Adverse Effect with respect to the Company since the date hereof.

  
 (e) From the date hereof to the Closing Date,
trading in the Common Stock shall not have been suspended by the Commission (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the Closing), and, at any time prior to the
Closing Date, trading in securities generally as reported by Bloomberg Financial Markets shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any
Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities. 
  
 ARTICLE III. 
 REPRESENTATIONS AND WARRANTIES

  
 3.1 Representations and Warranties of the Company.
Except as set forth under the corresponding section of the Disclosure Schedules delivered concurrently herewith, the Company hereby makes the following representations and warranties as of the date hereof and as of the Closing Date to each
Purchaser: 
  
 (a) Subsidiaries. The
Company has no direct or indirect Subsidiaries other than those listed on Schedule 3.1(a). The Company owns, directly or indirectly, all of the capital stock or comparable equity interests of each Subsidiary free and clear of any lien,
charge, security interest, encumbrance, right of first refusal or other restriction 
  

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(collectively, “Liens”), and all the issued and outstanding shares of capital stock or comparable equity interest of each Subsidiary are
validly issued and are fully paid, non-assessable and free of preemptive and similar rights. 
  
 (b) Organization and Qualification. Each of the Company and its Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite corporate power and authority to own and use its properties and assets and to carry on its business as
currently conducted. Neither the Company nor any Subsidiary is in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and its
Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be, would not have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, prospects, business or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or (iii) adversely impair the Company’s ability to perform fully on a
timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”). 
  
 (c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further consent or action is required by the Company, its Board of Directors or its stockholders. Each Transaction
Document has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, or moratorium or similar laws affecting the rights of creditors generally and the application of general principles of equity. 
  
 (d) No Conflicts. The execution, delivery and
performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any
Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or
other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or 
  

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other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as would not have or reasonably be expected to result in a Material Adverse Effect.

  
 (e) Filings, Consents and Approvals.
The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection
with the execution, delivery and performance by the Company of the Transaction Documents, other than (a) the filing with the Commission of the Registration Statement, the application(s) to each Trading Market for the listing of the Shares and
Warrant Shares for trading thereon in the time and manner required thereby, and applicable Blue Sky filings, (b) such as have already been obtained or such exemptive filings as are required to be made under applicable securities laws, and (c) such
other filings as may be required following the Closing Date under the Securities Act, the Exchange Act and corporate law. 
  
 (f) Issuance of the Securities. The Securities are duly authorized and, the Shares and Warrant Shares, when issued and paid for in
accordance with the Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens and shall not be subject to preemptive rights or similar rights of stockholders. The Company has reserved from its
duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants. 
  
 (g) Capitalization. The number of shares and type of all authorized, issued and outstanding capital stock, options and other
securities of the Company (whether or not presently convertible into or exercisable or exchangeable for shares of capital stock of the Company) is as set forth in the SEC Reports. All outstanding shares of capital stock are duly authorized, validly
issued, fully paid and nonassessable and have been issued in compliance with all applicable securities laws. Except as disclosed in Schedule 3.1(g), there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock. Except as set forth on Schedule 3.1(g), there are
no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) and the issue and sale of the Company Securities will not obligate the Company to issue shares
of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities. To the knowledge of
the Company, except as specifically disclosed in Schedule 3.1(g), no Person or group of related Persons beneficially owns (as determined pursuant to Rule 13d-3 under the Exchange Act), or has the right to acquire, by agreement with or by obligation
binding upon the Company, beneficial ownership of in excess of 5% of the outstanding Common Stock, ignoring for such purposes any 
  

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limitation on the number of shares of Common Stock that may be owned at any single time. 
  
 (h) SEC Reports; Financial Statements. The Company has filed all reports required to be filed by it
under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) of the Exchange Act, for the two years preceding the date hereof (or such shorter period as the Company was required by law to file such material) (the
foregoing materials, including the exhibits thereto (together with any materials filed by the Company under the Exchange Act, whether or not required), being collectively referred to herein as the “SEC Reports” and, together with
this Agreement and the Disclosure Schedules to this Agreement, the “Disclosure Materials”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any
such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, as applicable,
and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may
be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP or may be condensed or summary statements, and fairly present in all material
respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. All material agreements to which the Company is a party or to which the property or assets of the Company are subject are included as part of or specifically identified in the SEC Reports. 
  
 (i) Material Changes. Since the date of the latest
audited financial statements included within the SEC Reports, except as disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting or the identity of its auditors, (iv) the Company has not
declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities
to any officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information. 
  

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 (j) Litigation. Except as disclosed in the SEC Reports, there is no action, suit,
inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor, to the knowledge of the Company, any director or
officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is
not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act. 
  
 (k) Labor Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the
employees of the Company which could reasonably be expected to result in a Material Adverse Effect. 
  
 (l) Compliance. Except as disclosed in the SEC Reports, neither the Company nor any Subsidiary (i) is in default under or in
violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it
is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has
been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal,
state and local laws applicable to its business, except in the case of clauses (i), (ii) and (iii) as would not have or reasonably be expected to result in a Material Adverse Effect. 
  
 (m) Regulatory Permits. The Company and its Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits would not have or reasonably
be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

  
 (n) Title to Assets. The Company and
its Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them, in each case free and clear of all Liens, except for Liens as do not materially
affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the 
  

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Company and its Subsidiaries and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties.
To the knowledge of the Company, any real property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and its Subsidiaries are in material
compliance. 
  
 (o) Patents and
Trademarks. The Company and its Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights that are necessary or
material for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have or reasonably be expected to result in a Material Adverse Effect (collectively, the “Intellectual
Property Rights”). Neither the Company nor any Subsidiary has received a written notice that the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes the rights of any Person. To the knowledge of the
Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. 
  
 (p) Insurance. The Company and its Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any of its Subsidiaries has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business. 
  
 (q) Transactions With Affiliates and Employees.
Except as set forth in the SEC Reports, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other
than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner. 
  
 (r) Internal Accounting Controls. The Company and its
Subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange
Act Rules 13a-14 and 15d-14) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the 
  

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Company, including its subsidiaries, is made known to the certifying officers by others within those entities, particularly during the period in which the
Company’s Form 10-K or 10-Q, as the case may be, is being prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of a date within 90 days prior to the filing date of
the Form 10-Q for the quarter ended March 31, 2003 (such date, the “Evaluation Date”). The Company presented in its Form 10-Q for the quarter ended March 31, 2003 the conclusions of the certifying officers about the effectiveness of
the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term is defined in Item 307(b) of
Regulation S-K under the Exchange Act) or, to the knowledge of the Company, in other factors that could significantly affect the Company’s internal controls. 
  
 (s) Certain Fees. Except for the fees described on Schedule 3.1(s), no brokerage or
finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement.
The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by
this Agreement. 
  
 (t) Private Placement.
Assuming the accuracy of the Purchasers representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby.
The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market. Neither the Company nor any Person acting on the Company’s behalf has sold or offered to sell or solicited any offer to buy
the Securities by means of any form of general solicitation or advertising. 
  
 (u) Investment Company. The Company is not, and is not an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. 
  
 (v) Registration Rights. No Person has any right to
cause the Company to effect the registration under the Securities Act of any securities of the Company. 
  
 (w) Listing and Maintenance Requirements. The Company has not, in the two years preceding the date hereof, received notice from any
Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it
will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. 
  
 (x) Application of Takeover Protections. The Company and its Board of Directors have taken all necessary action, if any, in order
to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Certificate of Incorporation (or similar
charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the 
  

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Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including, without limitation, the
Company’s issuance of the Securities and the Purchasers’ ownership of the Securities. 
  
 (y) Disclosure. The Company confirms that neither the Company nor any other Person acting on its behalf has provided any of the
Purchasers or their agents or counsel with any information that constitutes or might constitute material, non-public information. The Company understands and confirms that the Purchasers will rely on the foregoing representations and covenants in
effecting transactions in securities of the Company. All disclosure provided to the Purchasers regarding the Company, its business and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, furnished by or on
behalf of the Company are true and correct and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were
made, not misleading. No event or circumstance has occurred or information exists with respect to the Company, its Subsidiaries or their respective businesses, properties, prospects, operations or condition (financial or otherwise), which, under
applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed. 
  
 (z) No Integrated Offering. Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of
the Securities Act or any applicable shareholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or
designated. 
  
 (aa) Solvency. Based on
the financial condition of the Company as of the Closing Date, (i) the Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature; (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof, and including the anticipated proceeds of the sale of the
Securities; and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all
amounts on or in respect of its debt when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in
respect of its debt). 
  
 (bb) Acknowledgment
Regarding Purchasers’ Purchase of Company Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions

  

 12 

 
contemplated hereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company or any other Purchaser
(or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction
Document and the transactions contemplated hereby and thereby is merely incidental to such Purchaser’s purchase of the Securities. The Company further represents to each Purchaser that the Company’s decision to enter into the Transaction
Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives. 
  
 (cc) S-3 Eligibility. The Company is eligible to register the resale of the Shares and Warrant Shares on Form S-3. 
  
 Each Purchaser acknowledges and agrees that the Company does not make or has
not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.1. 
  
 3.2 Representations and Warranties of the Purchasers. Each Purchaser hereby, for itself and for no other Purchaser, represents and warrants as of
the date hereof and as of the Closing Date to the Company as follows: 
  
 (a) Organization; Authority. Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate or partnership
power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations thereunder. The execution, delivery and performance by such Purchaser of the transactions
contemplated by this Agreement has been duly authorized by all necessary corporate or similar action on the part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such
Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms. 
  
 (b) Investment Intent. Such Purchaser is acquiring the Securities as principal for its own account
for investment purposes only and not with a view to or for distributing or reselling such Securities or any part thereof, without prejudice, however, to such Purchaser’s right, subject to the provisions of this Agreement, at all times to sell
or otherwise dispose of all or any part of such Securities pursuant to an effective registration statement under the Securities Act or under an exemption from such registration and in compliance with applicable federal and state securities laws.
Nothing contained herein shall be deemed a representation or warranty by such Purchaser to hold Securities for any period of time. Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. Such Purchaser does not
have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities. 
  
 (c) Purchaser Status. At the time such Purchaser was offered the Securities, it was, and at the date hereof it is an
“accredited investor” as defined in Rule 501(a) under the Securities Act. 
  

 13 

 (d) Experience of Such Purchaser. Such Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and
risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. 
  
 (e) Reliance on Exemptions. Such Purchaser
understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy
of, and the Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of the
Purchaser to acquire the Securities. 
  
 (f)
Information. Such Purchaser and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company, and materials relating to the offer and sale of the Securities, that have been
requested by the Purchaser or its advisors, if any. The Purchaser and its advisors, if any, have been afforded the opportunity to ask questions of the Company. The Purchaser acknowledges and understands that its investment in the Securities involves
a significant degree of risk. 
  
 (g)
Governmental Review. Such Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities or an investment therein.

  
 (h) Residency. Such Purchaser is a
resident of (or, if an entity, has its principal place of business in) the jurisdiction set forth immediately below such Purchaser’s name on the signature pages hereto. 
  
 (i) Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by such
Purchaser to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement. The Company shall have no obligation with respect to any fees
or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement. 
  
 The Company acknowledges and agrees that each Purchaser does not make or has
not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.2. 
  
 ARTICLE IV. 
 OTHER AGREEMENTS OF THE PARTIES

  
 4.1 Transfer Restrictions. 
  
 (a) The Securities may only be disposed of pursuant to an
effective registration statement under the Securities Act or pursuant to an available exemption from the 
  

 14 

 
registration requirements of the Securities Act, and in compliance with any applicable state securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or pursuant to Rule 144(k), to the Company, to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to
provide to the Company an opinion of counsel selected by the transferor, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred
Securities under the Securities Act. The Company hereby consents to and agrees to register on the books of the Company and with its transfer agent, without any such legal opinion (unless otherwise required by its transfer agent), any transfer of
Securities by a Purchaser to an Affiliate of such Purchaser, provided that the transferee agrees to be bound by all of the applicable provisions of the Transaction Documents, including the representations of the Purchaser, and certifies to the
Company that it is an “accredited investor” as defined in Rule 501(a) under the Securities Act. 
  
 (b) The Purchasers agree to the imprinting, so long as is required by this Section 4.1(b), of a legend on any of the Securities in the
following form: 
  
 THESE SECURITIES HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. NOTWITHSTANDING THE
FOREGOING, THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THESE SECURITIES. 
  
 The Company acknowledges and agrees that a Purchaser may from time to time pledge or grant a security interest in some or all of the
Securities in connection with a bona fide margin agreement or other loan or financing agreement secured by the Securities and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees
or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be
required of such pledge or transfer. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or
transfer of the Securities, including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of selling
stockholders thereunder. 
  

 15 

 (c) Certificates evidencing the Shares and Warrant Shares shall not contain any legend
(including the legend set forth in Section 4.1(b)), (i) while a registration statement (including the Registration Statement) covering the resale of such Shares or Warrant Shares is effective under the Securities Act, or (ii) following any sale of
such Shares or Warrant Shares pursuant to Rule 144, or (iii) if such Shares or Warrant Shares are eligible for sale under Rule 144(k), or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Company’s transfer agent promptly after the Effective Date if required by the Company’s transfer
agent to effect the removal of the legend hereunder. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the resale of the Warrant Shares, such Warrant Shares shall be issued free of
all legends. The Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than three Trading Days following the delivery by a Purchaser to the Company or the
Company’s transfer agent of a certificate representing Shares or Warrant Shares, as the case may be, issued with a restrictive legend, deliver or cause to be delivered to such Purchaser a certificate representing such Securities that is free
from all restrictive and other legends. The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section. 
  
 (d) In addition to such Purchaser’s other available
remedies, the Company shall pay to a Purchaser, in cash, as liquidated damages and not as a penalty, for each $1,000 of Shares or Warrant Shares (based on the Closing Price of the Common Stock on the date such Securities are submitted to the
Company’s transfer agent) subject to Section 4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after such third Trading Day until such certificate
is delivered. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities as required by the Transaction Documents, and such Purchaser shall have
the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. 
  

(e) Each Purchaser severally and not jointly agrees that the removal of the restrictive legend from certificates representing
Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance that the Purchaser will sell any Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus
delivery requirements, or an exemption therefrom. 
  
 4.2
Furnishing of Information. As long as any Purchaser owns Securities, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company
after the date hereof pursuant to the Exchange Act. Upon the request of any such holder of Securities, the Company shall deliver to such holder a written certification of a duly authorized officer as to whether it has complied with the preceding
sentence. As long as any Purchaser owns Securities, if the Company is not required to file reports pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such
information as is 
  

 16 

 
required for the Purchasers to sell the Securities under Rule 144. The Company further covenants that it will take such further action as any holder of
Securities may reasonably request, all to the extent required from time to time to enable such Person to sell such Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144. 
  
 4.3 Integration. The Company shall not, and shall use commercially
reasonable efforts to ensure that no Affiliate thereof shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or
sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to the Purchasers or that would be integrated with the offer or sale of the Securities for purposes of the rules and
regulations of any Trading Market. 
  
 4.4 Subsequent
Placements 
  
 (a) From the date hereof until
90 Trading Days after the Effective Date, the Company will not, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of
its equity or equity equivalent securities, including without limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable for
Common Stock. 
  
 (b) From the 90th Trading Day after the Effective Date until 18 months following the Effective Date, the Company shall not effect a financing of
its Common Stock or Common Stock Equivalents (a “Subsequent Financing”) unless (i) the Company delivers to each of the Purchasers hereunder a written notice at least 5 Trading Days prior to the closing of such Subsequent Financing
(the “Subsequent Financing Notice”) of its intention to effect such Subsequent Financing, which Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds
intended to be raised thereunder, the Person with whom such Subsequent Financing is proposed to be effected, and attached to which shall be a term sheet or similar document relating thereto and (ii) such Purchaser shall not have notified the Company
by 6:30 p.m. (New York City time) on the fifth (5th) Trading Day after its receipt of the Subsequent Financing
Notice of its willingness to provide (or to cause its designee to provide), subject to completion of mutually acceptable documentation, up to an amount equal to such Purchaser’s Subscription Amount at the Closing on the same terms set forth in
the Subsequent Financing Notice. If one or more Purchasers shall fail to so notify the Company of their willingness to participate in the Subsequent Financing, the Company must provide such Purchasers with a second Subsequent Financing Notice, and
the Purchasers will again have the right to participate, subject to completion of mutually acceptable documentation, up to an amount equal to such Purchaser’s Subscription Amount at the Closing, if the Subsequent Financing subject to the
initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within 60 Trading Days after the date of the initial Subsequent Financing Notice with the Person identified in the
Subsequent Financing Notice. 
  

 17 

 (c) Notwithstanding anything to the contrary herein, this Section 4.4 shall not apply to
the following: (i) the granting of options or restricted stock to employees, officers, directors and key consultants of the Company pursuant to any stock option plan or agreement duly adopted by the Company’s board of directors or a committee
of directors established for such purpose, or (ii) the exercise of any security issued by the Company in connection with the offer and sale of the Company’s securities pursuant to this Agreement, or (iii) the exercise of or conversion of any
convertible securities, options or warrants issued and outstanding on the date hereof, provided such securities have not been amended since the date hereof, or (iv) the issuance of securities in connection with a joint venture or development
agreement or strategic partnership or similar agreement approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital, or (v) the issuance of securities in connection with an equipment lease financing
transaction or a bank financing transaction approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital; (vi) the issuance of warrants to IRG or Rodman and Renshaw, Inc., or their respective assigns,
in connection with the engagement letters dated February 13, 2003, and July 8, 2003, respectively, as amended to date; or (vii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding pursuant to
subclauses (i), (iv), (v), and (vi) above. 
  
 4.5 Securities
Laws Disclosure; Publicity. The Company shall, by 8:30 a.m., Eastern Daylight Time on the Trading Day immediately following the date hereof, issue a press release reasonably acceptable to Rodman and Renshaw, Inc. disclosing all material terms of
the transactions contemplated by the Transaction Documents, to the extent permitted by applicable law. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated
hereby, and neither the Company nor any Purchaser shall issue any such press release or otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior
consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory
agency or Trading Market, without the prior written consent of such Purchaser, except (i) as required by federal securities law in connection with the Form 8-K to be filed following the Closing Date and the registration statement contemplated by the
Registration Rights Agreement and (ii) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under subclause (i) or (ii).

  
 4.6 Shareholders Rights Plan. No claim will be made or
enforced by the Company or any other Person that any Purchaser is an “Acquiring Person” under any shareholders rights plan or similar plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed
to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers. 
  

 18 

 4.7 Non-Public Information. Except as otherwise provided in Section 4.4(b) (unless, as to
Purchaser, such Purchaser declines to accept such information when offered by the Company), the Company covenants and agrees that neither it nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any
information that the Company believes constitutes material non-public information, unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and
confirms that each Purchaser shall be relying on the foregoing representations in effecting transactions in securities of the Company. 
  
 4.8 Use of Proceeds. Except as set forth on Schedule 4.8 attached hereto, the Company shall use the net proceeds from the sale of the Securities
hereunder for working capital purposes and not for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), to redeem any Company
equity or equity-equivalent securities or to settle any outstanding litigation. 
  
 4.9 Indemnification of Purchasers. The Company will indemnify and hold the Purchasers and their directors, officers, shareholders, partners, employees and agents (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any
such Purchaser Party may suffer or incur as a result of or relating to: (a) any misrepresentation, breach or inaccuracy, or any allegation by a third party that, if true, would constitute a breach or inaccuracy, of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents; or (b) any cause of action, suit or claim brought or made against such Purchaser Party and arising solely out of or solely resulting
from the execution, delivery, performance or enforcement of this Agreement or any of the other Transaction Documents and without causation by any other activity, obligation, condition or liability pertaining to such Purchaser. The Company will
reimburse such Purchaser for its reasonable legal and other expenses (including the cost of any investigation, preparation and travel in connection therewith) incurred in connection therewith, as such expenses are incurred. 
  
 4.10 Reservation of Common Stock. As of the date hereof, the Company
has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Shares pursuant to this Agreement and
Warrant Shares pursuant to the Warrants. 
  
 4.11 Listing of
Common Stock. The Company hereby agrees to use commercially reasonable efforts to maintain the listing of the Common Stock on the Trading Market, and, unless completed prior to the Closing, to list the applicable Shares and Warrant Shares on the
Trading Market as soon as reasonably practicable following the Closing (but not later than the earlier of the Effective Date and the first anniversary of the Closing Date). The Company further agrees, if the Company applies to have the Common Stock
traded on any other Trading Market, it will include in such application the Shares and Warrant Shares, and will take such other action as is necessary or desirable in the opinion of the Purchasers to cause the Shares and Warrant Shares to be listed
on such other Trading Market as promptly as possible. The Company will take all action reasonably necessary to continue the listing and trading of its Common Stock on a 
  

 19 

 
Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading
Market. 
  
 ARTICLE V. 
 MISCELLANEOUS 
  
 5.1 Termination. This Agreement may be terminated by the Company or, as to any Purchaser and the Company, any Purchaser, by written notice to the
other parties, if the Closing has not been consummated by the third Business Day following the date of this Agreement; provided that no such termination will affect the right of any party to sue for any breach by the other party (or parties).

  
 5.2 Fees and Expenses. Each party shall pay the fees
and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all
stamp and other taxes and duties levied in connection with the sale of the Securities. 
  
 5.3 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. 
  
 5.4 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified on the signature pages attached hereto prior to
6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number on the signature pages attached hereto on a day that is not
a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto. 
  
 5.5 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an
amendment, by the Company and each Major Purchaser or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any
manner impair the exercise of any such right. Any waiver effected in accordance with this Section 5.5 shall be binding upon each holder of any securities purchased under this Agreement at the time outstanding (including securities into which such
securities are convertible or exercisable), each future holder of all such securities, and the Company. 
  

 20 

 5.6 Construction. The headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions hereof. 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. 
  
 5.7 Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent
of each Major Purchaser; provided, however, that no consent shall be required in connection with a merger, consolidation or sale of substantially all of the Company’s assets. Any Purchaser may assign any or all of its rights under
this Agreement to any Person in connection with the transfer of the Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions hereof that apply to the “Purchasers”.

  
 5.8 No Third-Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.9.

  
 5.9 Governing Law. All questions concerning the
construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in The City of New York, Borough of Manhattan. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in The City of New York, New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of any of the Transaction Documents), 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 improper. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by delivering a copy thereof via
overnight delivery (with evidence of delivery) to such party at the address in effect for 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. Each party hereto (including its affiliates, agents, officers, directors and employees) hereby irrevocably waives, to the fullest extent permitted
by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of a
Transaction Document, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or
proceeding. 
  

 21 

 5.10 Survival. The representations, warranties, agreements and covenants contained herein shall
survive the Closing and delivery and/or exercise of the Securities, as applicable. 
  
 5.11 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof. 
  
 5.12 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the
validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute
therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement. 
  
 5.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Purchaser exercises a right,
election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights. 
  
 5.14 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction and customary and reasonable indemnity or security, if requested. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the
issuance of such replacement Securities. 
  
 5.15 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree
that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate. 
  
 5.16
Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of
such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or 
  

 22 

 
equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall, to the
extent permissible under applicable law, be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred. 
  
 5.17 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any
Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under any Transaction Document. The decision
of each Purchaser to purchase Securities pursuant to this Agreement has been made by such Purchaser independently of any other Purchaser and independently of any information, materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or of the Subsidiary which may have been made or given by any other Purchaser or by any agent or employee of any other Purchaser,
and no Purchaser or any of its agents or employees shall have any liability to any other Purchaser (or any other person) relating to or arising from any such information, materials, statements or opinions. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are
in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Document. Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with
making its investment hereunder and that no other Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment hereunder. Each Purchaser shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. The Company has
elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by the Purchasers. 
  
 (Signature Page Follows) 
  

 23 

 IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed
by their respective authorized signatories as of the date first indicated above. 
  

	CORTEX PHARMACEUTICALS INC.	 	 Address for Notice:
 15231 Barranca Parkway
 Irvine, CA 92618
 Tel: 949 727 3157
 Fax: 949 727 3657
 Attn: President and CEO

	 	 	 	 
	 By:
	 	 /s/ Roger G. Stoll

	 
	 	 	 Name:
	 
	 	 	 Title:
	 
	 	 	 	 

  
 With
copy to (which shall not constitute notice): 
  
 Stradling Yocca Carlson & Rauth 
 660 Newport Center Drive, Suite 1600 
 Newport Beach, California 92660 
 Attn: Lawrence B. Cohn 
 Tel: (949) 725-4000 
 Fax: (949) 725-4100 
  
 [SIGNATURE PAGE CONTINUES] 
  

 24 

 [PURCHASER’S SIGNATURE PAGE] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated above. 
  

	 SMITHFIELD FIDUCIARY LLC
	 	 
		
	 By:   /s/ Adam J. Chill

	 	 
	 Name: Adam J. Chill
	 	 
	 Title:   Authorized Signatory
	 	 

  
 Subscription Amount: $250,000.50 
 Shares: 166,667 
 Warrants: 166,667 
  
 Address for Notice: 
 c/o Highbridge Capital Management, LLC 
 9 West 57th Street 
 27th Floor 
 New York, NY 10019 
 Fax: 212-751-0755 
 Tel: 212-287-4720 
 Attention: Ari J. Storch / Adam J. Chill 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 25 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	 OMICRON MASTER TRUST
	  	 Address for Notice:
 c/o Omicron Capital L.P.
 810 Seventh Avenue, 39th Fl.
 New York, NY 10019
 Tel: 212.803-5263
 Fax: 212.803.5269
 Attn: Brian Daly

	 By:  Omicron Capital L.P., as advisor
	  
	 By:  Omicron Capital Inc., its general partner
	  
	 	  
	 	  
	 	  
	 By:  /s/ Oliver Morali

	  
	 Name: Oliver Morali
	  
	 Title: President
	  

  
 Subscription Amount: $250,000 
 Shares: 
 Warrant Shares: 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 26 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	
	CRANSHIRE CAPITAL L.P.
		
	 By:
	 	 /s/ Mitchell Kopin

	 Name:  Mitchell Kopin

	 Title:
	 	 

  
 Address for Notice: 
  
 Attn: Mitchell
Kopin 
 666 Dundee Road 
 Suite 1901 
 Northbrook, IL 60062 
 Fax: 847-562-9031 
  
 Subscription Amount: $300,000 
 Shares: 200,000 
 Warrant Shares: 200,000 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 27 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	 ALPHA CAPITAL AG
	  	 Address for Notice:
 Lettstrasse 32
 Furstentum 9490
 Vaduz, Liechtenstein
 Fax: 011-423 232 3196
 Attn: Director

	 	  
	 	  
	 By:  /s/ K. Ackerman

	  
	 Name: K. Ackermann
	  
	 Title: Director
	  

  
 Subscription Amount: $250,000 
 Shares: 166,667 
 Warrant Shares: 166,667 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 28 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	 GRYPHON MASTER FUND, LP

	 By: Gryphon Partners, L.P., its General Partner

	 By: Gryphon Management Partners, L.P., its General Partner

	 By: Gryphon Advisors, LLC, its General Partner

  

	 By:  /s/ E.B. Lyon IV

	  	 
	 Name: E.B. Lyon IV
	  	 
	 Title: Authorized Agent
	  	 

  
 Address for Notice: 
 500 Crescent Court, Suite #270 
 Dallas, Texas 75201 
 Tel: (214) 871-6783 
 Fax: (214) 871-6909 
 Attn: Ryan Wolters 
  
 Subscription Amount: $250,000.50 
 Shares: 166,667 
 Warrant Shares: 166,667 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 29 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	 THE TAIL WIND FUND LIMITED
	  	 
	 By: Tail Wind Advisory & Management Ltd.
	  	 
		
	 By:  /s/ David Crook

	  	 
	    David Crook, Chief Executive Officer
	  	 
		
	 Address for Notice:
	  	 
	 David Crook, Esq.
	  	 
	 Chief Executive Officer
	  	 
	 Tail Wind Advisory & Management Ltd.
	  	 
	 1st Floor, No. 1 Regent Street
	  	 
	 London, SW1Y 4NS, UK
	  	 
	 Fax: +44 20 7468 7657
	  	 
		
	 	  	 Please copy all correspondence to:

	 	  	 Peter J. Weisman, P.C.

	 	  	 335 Madison Avenue, Suite 1702

	 	  	 New York, NY 10005

	 	  	 Tel: +212-418-4792 Fax: +212-317-8855

		
	 Subscription Amount: $300,000
	  	 
	 Shares: 200,000
	  	 
	 Warrant Shares: 200,000
	  	 

  
 [PURCHASERS’
SIGNATURE PAGES FOLLOW] 
  

 30 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	 SPECTRA CAPITAL MANAGEMENT
	  	 
		
	 By:  /s/ Gregory Porges

	  	 
	 Name:  Gregory Porges
	  	 
	 Title:    Sole Member
	  	 

  
 Address for Notice: 
 Spectra Capital Management 
 120 Broadway - Suite 1050 
 New York, NY 10271 
 Attn: Ian Estepan 
 Tel:   212.433.6475 
 iestepan@spectrafinancialgroup.com 
  
 Subscription Amount: $100,000 
 Shares: 
 Warrant Shares: 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 31 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	 LANGLEY PARTNERS, L.P.
	  	 
		
	 By:  /s/ Jeffrey Thorp

	  	 
	 Name:  Jeffrey Thorp
	  	 
	 Title:   Managing Partner of G.P.
	  	 

  
 Address for Notice: 
 Langley Capital, LLC 
 535 Madison Avenue, 7th Floor 
 New York, New York 10022 
 Tel: (212) 850-7528 
 Fax: (212) 850-7589 
 Attn: Jeffrey Thorp 
 jt@lcap.com 
  
 Subscription Amount: $240,000 
 Shares: 160,000 
 Warrant Shares: 160,000 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 32 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	
	OTAPE INVESTMENTS LLC
		
	 By:
	 	 /s/ Richard M. Cayne

	 	 	     Name: Richard M. Cayne

	 	 	     Title: General Counsel

  
 Address for Notice: 
  
 OTAPE
Investments LLC 
 One Manhattanville Road 
 Purchase, NY 10577 
  
 Subscription Amount: $250,000 
 Shares: 
 Warrant Shares: 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 33 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	AIG DKR SOUNDSHORE PRIVATE INVESTORS HOLDING FUND LTD.
		
	 By:
	 	 /s/ Anthony Giordano

	 	 	     Name: Anthony Giordano

	 	 	     Title: Director

  
 Address for Notice: 
 AIG DKR SoundShore Private Investors Holding Fund Ltd. 
 c/o DKR Capital Partners L.P. 
 1281 East Main Street 
 Stanford, CT 06902 
 Attn: General Counsel 
 Attn: 
  
 Subscription Amount: $100,000 
 Shares: 66,667 
 Warrant Shares: 66,667 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 34 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	PORTSIDE GROWTH AND OPPORTUNITY FUND
		
	 By:
	 	 /s/ Jeffrey Smith

	 	 	         Name: Jeffrey Smith

	 	 	         Title: Authorized Signatory

  
 Address for Notice: 
 c/o Ramius Capital Group, LLC 
 666 Third Avenue, 26th Floor 
 New York, New York 10017 
 Attn: Jeffrey Smith 
 Tel: 212-845-7955 
 Fax: 212-845-7995 
  
 Subscription Amount: $200,000 
 Shares: 
 Warrant Shares: 
  
 [PURCHASERS’ SIGNATURE PAGES
FOLLOW] 
  

 35 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	CASTLE CREEK HEALTHCARE PARTNERS LLC
	 By Castle Creek Partners, LLC

	 Its Investment Manager

		
	 By:
	 	 /s/ Thomas A. Frei

	 	 	         Name: Thomas A. Frei

	 	 	         Title: Managing Director

  
 Address for Notice: 
  
 Castle
Creek Healthcare Partners 
 c/o Castle Creek Partners, LLC 
 111 West Jackson Blvd., Suite 2020 
 Chicago, IL 60684 
 Attn: Thomas A. Frei 
 Tel: 312.499.6900 
 Fax: 312.499.69999 
  
 Subscription
Amount: $200,001 
 Shares: 133,334 
 Warrant Shares: 133,334 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 36 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	PROMED PARTNERS, L.P.
		
	 By:
	 	 /s/ Barry Kurokawa

	 	 	         Name: Barry Kurokawa

	 	 	         Title: Managing Director

  
 Address for Notice: 
 ProMed Management, L.L.C. 
 237 Park Avenue, 9th Floor 
 New York, New York 10017 
 Tel: (212) 692-3626 
 Fax: (212) 692-3627 
 Attn: Barry Kurokawa 
 bkurokawa@promedmgmt.com 
  
 Subscription Amount: $426,900 
 Shares: 284,600 
 Warrant Shares: 284,600 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 37 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	PROMED OFFSHORE FUND, LTD.
		
	 By:
	 	 /s/ Barry Kurokawa

	 	 	         Name: Barry Kurokawa

	 	 	         Title: Managing Director

  
 Address for Notice: 
 ProMed Management, L.L.C. 
 237 Park Avenue, 9th Floor 
 New York, New York 10017 
 Tel: (212) 692-3626 
 Fax: (212) 692-3627 
 Attn: Barry Kurokawa 
 bkurokawa@promedmgmt.com 
  
 Subscription Amount: $73,102.50 
 Shares: 48,735 
 Warrant Shares: 48,735 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 38 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	PLATINUM PARTNERS VALUE ARBITRAGE FUND LP
		
	 By:
	 	 /s/ Frank Giorgio

	 	 	         Name: Frank Giorgo

	 	 	         Title: CFO

  
 Address for Notice: 
 c/o Platinum Partners LLC 
 152 West 57th Street 
 New York, New York 10271 
 Tel. 212-581-0500 
 Fax. 212-581-7256 
 Attention: Frank Giorgio, CFO 
 Email: fgiorgio@platinumlp.com 
  
 Subscription Amount: $200,000 
 Shares: 133,333 
 Warrant Shares: 133,333 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 39 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	ORION BIOMEDICAL FUND, LP
		
	 By:
	 	 /s/ Lindsay Rosewald

	 	 	         Name: Lindsay Rosewald

	 	 	         Title: Managing Member

  
 Address for Notice: 
 787 7th Avenue, 48th Floor

 New York, New York 10019 
 Attn: Joshua Kazam 
 Tel: (212) 554-4284 
 Fax: (212) 554-4314 
  
 Subscription Amount: $616,125 
 Shares: 410,750 
 Warrant Shares: 410,750 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 40 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	ORION BIOMEDICAL OFFSHORE FUND, LP
		
	 By:
	 	 /s/ Lindsay Rosewald

	 	 	         Name: Lindsay Rosewald

	 	 	         Title: Managing Member

  
 Address for Notice: 
 787 7th Avenue, 48th Floor

 New York, New York 10019 
 Attn: Joshua Kazam 
 Tel: (212) 554-4284 
 Fax: (212) 554-4314 
  
 Subscription Amount: $133,875 
 Shares: 89,250 
 Warrant Shares: 89,250 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 41 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	BRISTOL INVESTMENT FUND, LTD.	 	 Address for Notice:
 c/o Bristol Capital Advisors, LLC
 6363 Sunset Boulevard, 5th Floor
 Hollywood, California 90028
 Attn: Amy Wang, Esq.
 Fax: (323) 468-8307

	 	 	 	 
	 	 	 	 
	 	 	 	 
	 By:
	 	 /s/ Paul Kessler

	 
	 	 	 Name:
	 
	 	 	 Title:
	 

  
 Subscription Amount: $309,995 
 Shares: 206,664 
 Warrant Shares: 206,664 
  

 42 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	XMARK FUND, LTD.
		
	 By:
	 	 /s/ David Cavalier

	 	 	         Name: David Cavalier

	 	 	         Title: Chief Operating Officer

  
 Address for Notice: 
 Attn: Anne K. Abramczyk 
 152 West 57th Street 
 21st Floor 
 New York, NY 10019 
 Tel: (212) 247-1329 
  
 Subscription Amount: 
 Shares: 
 Warrant Shares: 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 43 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	XMARK FUND, L.P.
		
	 By:
	 	 /s/ David Cavalier

	 	 	         Name: David Cavalier

	 	 	         Title: Chief Operating Officer

  
 Address for Notice: 
 Attn: Anne K. Abramczyk 
 152 West 57th Street 
 21st Floor 
 New York, NY 10019 
 Tel: (212) 247-1329 
  
 Subscription Amount: 
 Shares: 
 Warrant Shares: 
  
 [PURCHASERS’ SIGNATURE PAGES FOLLOW] 
  

 44 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	PATIENCE PARTNERS, L.P.
		
	 By:
	 	 /s/ Robert D. Van Roijen

	 	 	         Name: Robert D. Van Roijen

	 	 	         Title: General Partner

  
 Address for Notice: 
 950 North Orlando Ave., Suite 101 
 Winter Park, FL 32789 
 Attn: Robert D. Van Roijen 
 Tel: (407) 740-0882 
  
 Subscription Amount: $50,000 
 Shares: 33,333 
 Warrant Shares: 33,333 
  
 [PURCHASERS’ SIGNATURE
PAGES FOLLOW] 
  

 45 

 [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT] 
  

	ROBERT D. VAN ROIJEN
		
	 By:
	 	 /s/ Robert D. Van Roijen

	 	 	         Name: Robert D. Van Roijen

  
 Address for Notice: 
 c/o Tox Financial 
 North Orlando Ave., Suite 101 
 Winter Park, FL 32789 
 Attn: Robert D. Van Roijen 
 Tel: (407) 740-0882 
  
 Subscription Amount: $200,000 
 Shares: 133,333 
 Warrant Shares: 133,333 
  

 46 

 Schedule A 
  

	 Name of Purchaser

	 	 Number of Units

	 	 Number of Warrants

	 Smithfield Fiduciary LLC
	 	166,667	 	166,667
	 Omicron Master Trust
	 	166,667	 	166,667
	 Cranshire Capital L.P.
	 	200,000	 	200,000
	 Langley Capital
	 	160,000	 	160,000
	 OTAPE Investments
	 	166,667	 	166,667
	 AIG DKR Soundshore
	 	66,667	 	66,667
	 Portside Growth
	 	133,333	 	133,333
	 Alpha Capital AG
	 	166,667	 	166,667
	 Gryphon Master Fund L.P.
	 	166,667	 	166,667
	 The Tail Wind Fund Ltd.
	 	200,000	 	200,000
	 Castle Creek Partners
	 	133,334	 	133,334
	 Spectra Capital Management
	 	66,667	 	66,667
	 Platinum Partners
	 	133,333	 	133,333
	 ProMed Partners, L.P.
	 	284,600	 	284,600
	 ProMed Offshore Fund, Ltd.
	 	48,735	 	48,735
	 Orion Biomedical
	 	410,750	 	410,750
	 Orion Biomedical Offshore
	 	89,250	 	89,250
	 Bristol Investment Fund, Ltd.
	 	206,664	 	206,664
	 Xmark Fund, L.P.
	 	66,667	 	66,667
	 Xmark Fund, Ltd.
	 	133,333	 	133,333
	 Patience Partners
	 	33,333	 	33,333
	 Robert D. Van Roijen
	 	133,333	 	133,333
	 Total
	 	3,333,334	 	3,333,334

  

 47 

 EXHIBIT A 
  

REGISTRATION RIGHTS AGREEMENT 
  
 This Registration Rights Agreement (this “Agreement”) is made and entered into as of August 21, 2003, by and among Cortex
Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and the investors signatory hereto (each a “Purchaser” and collectively, the “Purchasers”). 
  
 This Agreement is made pursuant to the Securities Purchase Agreement, dated
as of the date hereof among the Company and the Purchasers (the “Purchase Agreement”). 
  
 The Company and the Purchasers hereby agree as follows: 
  
 1. Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given
such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: 
  
 “Effectiveness Date” means, with respect to the Registration Statement required to be filed hereunder, the earlier of (a)
the 75th calendar day following the Closing Date (110th calendar day in the event of a review by the Commission) and (b) the fifth Trading Day following the date on which the Company is notified by the Commission that the Registration Statement will
not be reviewed or is no longer subject to further review and comments. 
  
 “Effectiveness Period” shall have the meaning set forth in Section 2(a). 
  
 “Filing Date” means, with respect to the Registration Statement required to be filed hereunder, the earlier of (i)
5th calendar day following the date that the Company files its Annual Report on Form 10-K for the year ended June
30, 2003 or (ii) October 15, 2003. 
  
 “Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities. 
  

“Indemnified Party” shall have the meaning set forth in Section 5(c). 
  
 “Indemnifying Party” shall have the meaning
set forth in Section 5(c). 
  
 “Losses” shall have the meaning set forth in Section 5(a). 
  
 “Major Holders” means the original Holders on the Closing Date holding, on the date of determination, at least 50,000
Shares, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement, and subsequent transferees holding, on the date
of determination, at least 250,000 Shares, subject to 

  

 1 

 
adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the
date of this Agreement. 
  
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Prospectus” means the prospectus included
in the 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 the 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. 
  
 “Registrable Securities” means the Shares and the Warrant Shares, together with any shares of Common Stock issued or
issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing. 
  
 “Registration Statement” means the registration statements required to be filed hereunder, including (in each case) the
Prospectus, amendments and supplements to the 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 the
registration statement. 
  
 “Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as
such Rule. 
  
 “Rule 424” means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

  
 “Securities Act” means the
Securities Act of 1933, as amended. 
  
 2. Registration.

  
 (a) On or prior to the Filing Date, the
Company shall prepare and file with the Commission the Registration Statement covering the resale of all of the Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement required
hereunder shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case the Registration Statement shall be on another appropriate form in accordance herewith). The
Registration Statement required hereunder shall contain (except if 
  

 2 

 
otherwise directed by the Major Holders) the “Plan of Distribution” attached hereto as Annex A. The Company shall cause the
Registration Statement to become effective and remain effective as provided herein. The Company shall use its commercially reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as
possible after the filing thereof, but in any event not later than the Effectiveness Date, and shall use its commercially reasonable efforts to keep the Registration Statement continuously effective under the Securities Act until the date when all
Registrable Securities covered by the Registration Statement (a) have been sold pursuant to the Registration Statement or an exemption from the registration requirements of the Securities Act or (b) may be sold without volume restrictions pursuant
to Rule 144(k) as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent and the affected Holders (the “Effectiveness Period”).

  
 (b) If: (i) a Registration Statement is not
filed on or prior to its Filing Date (if the Company files a Registration Statement without affording a Major Holder the opportunity to review and comment on the same as required by Section 3(a), the Company shall not be deemed to have satisfied
this clause (i)); provided, however, that if a Holder fails to provide the Company with any information that is required to be provided in the Registration Statement with respect to such Holder pursuant to Section 3(k), then the Filing
Date shall be extended until two Trading Days following the date of receipt by the Company of such required information, or (ii) the Company fails to file with the Commission a request for acceleration in accordance with Rule 461 promulgated under
the Securities Act, within five Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that a Registration Statement will not be “reviewed,” or not subject to further review, or
(iii) prior to the date when such Registration Statement is first declared effective by the Commission, the Company fails to file a pre-effective amendment and otherwise respond in writing to comments made by the Commission in respect of such
Registration Statement within fifteen Trading Days after the receipt of comments by or notice from the Commission that such amendment is required in order for a Registration Statement to be declared effective, or (iv) a Registration Statement filed
or required to be filed hereunder is not declared effective by the Commission on or before the Effectiveness Date, or (v) after a Registration Statement is first declared effective by the Commission, it ceases for any reason to remain continuously
effective as to all Registrable Securities for which it is required to be effective, or the Holders are not permitted to utilize the Prospectus therein to resell such Registrable Securities, for in any such cases twenty-five Trading Days (which need
not be consecutive days) in the aggregate during any 12-month period (any such failure or breach being referred to as an “Event,” and for purposes of clause (i) or (iv) the date on which such Event occurs, or for purposes of clause
(ii) the date on which such five Trading Day period is exceeded, or for purposes of clause (iii) the date which such fifteen Trading Day period is exceeded, or for purposes of clause (v) the date on which such twenty-five Trading Day period is
exceeded, being referred to as “Event Date”), then in addition to any other rights the Holders may have hereunder or under applicable law: (x) on each such Event Date the Company shall pay to each Holder an amount in cash, as
liquidated damages and not as a penalty, equal to 2% of the aggregate purchase price paid by such Holder pursuant to the Purchase Agreement for any 
  

 3 

 
Registrable Securities then held by such Holder; and (y) on each monthly anniversary of each such Event Date (if the applicable Event shall not have been
cured by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as liquidated damages and not as a penalty, equal to 2% of the aggregate purchase price paid by such Holder pursuant to the Purchase
Agreement for any Registrable Securities then held by such Holder. If the Company fails to pay any liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 18%
per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The liquidated
damages pursuant to the terms hereof shall apply on a pro-rata basis for any portion of a month prior to the cure of an Event. 
  
 3. Registration Procedures 
  
 In connection with the Company’s registration obligations hereunder, the Company shall: 
  
 (a) Not less than three Trading Days prior to the filing of
the Registration Statement or any related Prospectus or any amendment or supplement thereto, (i) furnish to the Major Holders copies of all such documents proposed to be filed (including documents incorporated or deemed incorporated by reference to
the extent requested by such Person), which documents will be subject to the review of such Major Holders, and (ii) cause its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be
necessary, in the reasonable opinion of respective counsel to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file the Registration Statement or any such Prospectus or any amendments or supplements
thereto to which the Holders of a majority of the Registrable Securities shall reasonably object in good faith. 
  
 (b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to the Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep the Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible, and in any event within ten Trading Days, to any comments received from the
Commission with respect to the Registration Statement or any amendment thereto and, as promptly as reasonably possible, upon request, provide the Major Holders true and complete copies of all correspondence from and to the Commission relating to the
Registration Statement; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by the Registration Statement during the applicable
period in accordance with the intended methods of disposition by the Holders thereof set forth in the Registration Statement as so amended or in such Prospectus as so supplemented. 
  

 4 

 (c) Notify the Holders of Registrable Securities to be sold as promptly as reasonably
possible (and, in the case of (i)(A) below, not less than two Trading Days prior to such filing) and (if requested by any such Person) confirm such notice in writing promptly following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a “review” of the Registration Statement and whenever the Commission comments in writing on
the Registration Statement (the Company shall upon request provide true and complete copies thereof and all written responses thereto to each of the Major Holders); and (C) with respect to the Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to the Registration
Statement or Prospectus or for additional information; (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of the Registration Statement covering any or all of
the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (v) of the occurrence of any event or passage of time that makes the financial statements included in the Registration Statement
ineligible for inclusion therein or any statement made in the Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of the Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any 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. 
  
 (d) Use its commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the
effectiveness of the Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment. 
  
 (e) Furnish to each Holder, without charge, at least one
conformed copy of the Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Holder, and all
exhibits to the extent requested by such Holder (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission. 
  
 (f) Promptly deliver to each Holder, without charge, as many copies of the Prospectus or Prospectuses
(including each form of prospectus) and each amendment or supplement thereto as such Holder may reasonably request in connection with resales by the Holder of Registrable Securities. The Company hereby consents to the use of such 
  

 5 

 
Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto, except after the giving on any notice pursuant to Section 3(c). 
  
 (g) Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate
with the selling Holders in connection with the registration or qualification (or exemption from the registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in writing, to keep each the registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things
reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided, that the Company shall not be required to qualify generally to do business in any jurisdiction
where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction. 
  
 (h) If requested by the Holders, cooperate with the Holders
to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to the Registration Statement, which certificates shall be free, to the extent permitted by the Purchase
Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may request. 
  
 (i) Upon the occurrence of any event contemplated by Section 3(c)(v), as promptly as reasonably possible,
prepare a supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other
required document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holders in accordance with clauses (ii) through (v) of Section 3(c) above to suspend the use of the use of any Prospectus until
the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use commercially reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is
practicable. The Company shall be entitled to exercise its right under this Section 3(i) to suspend the availability of a Registration Statement and Prospectus, subject to the payment of liquidated damages pursuant to Section 2(b), for a period not
to exceed 60 days (which need not be consecutive days) in any 12 month period. 
  
 (j) Comply with all applicable rules and regulations of the Commission. 
  

 6 

 (k) The Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by such Holder and, if required by the Commission, the Person thereof that has voting and dispositive control over the Shares. 
  
 4. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses referred to in the foregoing sentence
shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the Trading Market on which the Common Stock is then listed for trading,
and (B) in compliance with applicable state securities or Blue Sky laws), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v)
Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In
addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. 
  
 5. Indemnification 
  
 (a) Indemnification by the Company. The Company
shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, to the extent arising out of or relating to any untrue or alleged untrue statement of a material
fact contained in the Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but
only to the extent, that (1) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to
such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such 
  

 7 

 
form of Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or (2) in the
case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and
prior to the receipt by such Holder of the Advice contemplated in Section 6(d). The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions
contemplated by this Agreement. 
  
 (b)
Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out
of or based upon: (x) such Holder’s failure to comply with the prospectus delivery requirements of the Securities Act or (y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or
any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the
statements therein not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company specifically for inclusion in the Registration
Statement or such Prospectus or (ii) to the extent that (1) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent
that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement (it being
understood that the Holder has approved Annex A hereto for this purpose), such Prospectus or such form of prospectus or in any amendment or supplement thereto or (2) in the case of an occurrence of an event of the type specified in Section
3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in
Section 6(d). In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification
obligation. 
  
 (c) Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the
“Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and
expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities 
  

 8 

 
pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have prejudiced the Indemnifying Party. 
  
 An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if
such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable
fees and expenses of one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. 
  
 All reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection
with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party;
provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is not entitled to indemnification hereunder,
determined based upon the relative faults of the parties. 
  
 (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified
Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference
to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and 
  

 9 

 
opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to
include, subject to the limitations set forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such
fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. 
  
 The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount of proceeds actually received by such Holder from the sale of the Registrable Securities by reason of such untrue or alleged untrue statement or omission or alleged omission, except in
the case of fraud by such Holder. The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. 
  
 6. Miscellaneous 
  
 (a) Remedies. In the event of a breach by the Company
or by a Holder, of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. 
  
 (b) No Piggyback on Registrations. Except as set
forth on Schedule 6(b), neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in a Registration Statement other than the Registrable Securities, and the
Company shall not after the date hereof enter into any agreement providing any such right to any of its security holders. Except as set forth in the SEC Reports, no Person has any right to cause the Company to effect the registration under the
Securities Act of any securities of the Company. The Company shall not file any other registration statement until after the Effective Date, other than any registration statement on Form S-8 relating to the registration of equity securities issuable
in connection with a stock option or other employee benefit plan. 
  
 (c) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities
pursuant to the Registration Statement. 
  
 (d)
Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence 
  

 10 

 
of any event of the kind described in Section 3(c), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration
Statement until such Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus
may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop
orders to enforce the provisions of this paragraph. 
  
 (e) Piggy-Back Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or
their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the stock option or other employee benefit plans, then the Company
shall send to each Holder a written notice of such determination and, if within fifteen days after the date of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such
Registrable Securities such Holder requests to be registered, subject to customary underwriter cutbacks applicable to all holders of registration rights. 
  
 (f) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and each Major Holder of the then outstanding Registrable Securities.

  
 (g) Notices. Any and all notices or
other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number provided for below prior to 6:30 p.m. (New York City time) on a Trading Day, (ii) the Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number provided for
below later than 6:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon
actual receipt by the party to whom such notice is required to be given. The address or facsimile number for such notices and communications shall be delivered and addressed as set forth in the Purchase Agreement 
  
 (h) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. Each Holder may assign their respective rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement. 
  

 11 

 (i) Execution and Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall
create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof. 
  
 (j) Governing Law. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.
Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers,
shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, New York. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
sitting in the City of New York, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of the any of this
Agreement), 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 improper. Each party
hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by delivering a copy thereof via overnight delivery (with evidence of delivery) to such party at the address in
effect for 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. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. 
  
 (k) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. 

 
 (l) Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect
and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by
such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the 
  

 12 

 
remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

  
 (m) Headings. The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 
  
 (n) Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser hereunder is several and not
joint with the obligations of any other Purchaser hereunder, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser hereunder. Nothing contained herein or in any other agreement or document
delivered at any closing, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Purchaser shall be entitled to protect and enforce its rights, including without limitation the rights arising out
of this Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. 
  
 (o) Conflicting Instructions. A person or entity is deemed to be a holder of Registrable Securities whenever such person or entity
owns of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons or entities with respect to the same Registrable Securities, the Company will act upon the basis of
instructions, notice or election received from the registered owner of such Registrable Securities. 
  

 13 

 EXHIBIT A 
  

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above. 
  

	CORTEX PHARMACEUTICALS, INC.
		
	 By:
	 	       /s/    ROGER G. STOLL

	 	 	       Name:

	 	 	       Title:

  
 [PURCHASERS’
SIGNATURE PAGES TO FOLLOW] 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 SMITHFIELD FIDUCIARY LLC 
  

	 By:
	 	 /s/ Adam J. Chill

	 Name:
	 	 Adam J. Chill

	 Title:
	 	 Authorized Signatory

  

 15 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 OMICRON MASTER TRUST 
 By: Omicron Capital L.P., as advisor 
 By: Omicron Capital Inc., its general partner 
  

	 By:
	 	 /s/ Oliver Morali

	 	 	       Name:   Oliver Morali

	 	 	       Title:   President

  

 16 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 CRANSHIRE CAPITAL L.P. 
  

	 By:
	 	 /s/ Mitchell Kopin

	 Name:
	 	   Mitchell Kopin

	 Title:
	 	 

  

 17 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 ALPHA CAPITAL AG 
  

		
	 By:
	 	 /s/ K. Ackerman

	 	 	 Name:   K. Ackermann

	 	 	 Title:   Director

  

 18 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 GRYPHON MASTER FUND, LP 
 By: Gryphon Partners, L.P., its General Partner 
 By: Gryphon Management Partners, L.P., its General Partner 
 By: Gryphon Advisors, LLC, its General Partner 
  

	 By:
	 	 /s/ E.B. Lyon IV

	 	 	       Name: E.B. Lyon IV

	 	 	       Title: Authorized Agent

  

 19 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 THE TAIL WIND FUND LIMITED 
 By: Tail Wind Advisory & Management Ltd. 
  

	 By:
	 	 /s/ David Crook

	 	 	       David Crook, Chief Executive Officer

  

 20 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 SPECTRA CAPITAL MANAGEMENT 
  

	 By:
	 	 /s/ Gregory Porges

	 	 	       Name: Gregory Porges

	 	 	       Title: Sole Member

  

 21 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 LANGLEY PARTNERS, L.P. 
  

	 By:
	 	 /s/ Jeffrey Thorp

	 	 	       Name: Jeffrey Thorp

	 	 	       Title: Managing Partner of G.P.

  

 22 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 OTAPE INVESTMENTS LLC 
  

	 By:
	 	 /s/ Richard M. Cayne

	 	 	       Name: Richard M. Cayne

	 	 	       Title: General Counsel

  

 23 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 AIG DKR SOUNDSHORE PRIVATE INVESTORS HOLDING FUND LTD. 
  

	 By:
	 	 /s/ Anthony Giordano

	 	 	       Name: Anthony Giordano

	 	 	       Title: Director

  

 24 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 PORTSIDE GROWTH AND OPPORTUNITY FUND 
  

	 By:
	 	 /s/ Jeffrey Smith

	 	 	       Name: Jeffrey Smith

	 	 	       Title: Authorized Signatory

  

 25 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 CASTLE CREEK HEALTHCARE PARTNERS LLC 
 By Castle Creek Partners, LLC 
 Its Investment Manager 
  

	 By:
	 	 /s/ Thomas A. Frei

	 	 	       Name: Thomas A. Frei

	 	 	       Title: Managing Director

  

 26 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 PROMED PARTNERS, L.P. 
  

	 By:
	 	 /s/ Barry Kurokawa

	 	 	       Name: Barry Kurokawa

	 	 	       Title: Managing Director

  
  

 27 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 PROMED OFFSHORE FUND, LTD. 
  

	 By:
	 	 /s/ Barry Kurokawa

	 	 	       Name: Barry Kurokawa

	 	 	       Title: Managing Director

  

 28 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 PLATINUM PARTNERS VALUE ARBITRAGE FUND LP 
  

	 By:
	 	 /s/ Frank Giorgio

	 	 	       Name: Frank Giorgo

	 	 	       Title: CFO

  

 29 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 ORION BIOMEDICAL FUND, LP 
  

	 By:
	 	 /s/ Lindsay Rosewald

	 	 	       Name: Lindsay Rosewald

	 	 	       Title: Managing Member

  

 30 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 ORION BIOMEDICAL OFFSHORE FUND, LP 
  

	 By:
	 	 /s/ Lindsay Rosewald

	 	 	       Name: Lindsay Rosewald

	 	 	       Title: Managing Member

  

 31 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 BRISTOL INVESTMENT FUND, LTD. 
  

	 By:
	 	 /s/ Paul Kessler

	 	 	 Name:

	 	 	 Title:

  

 32 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 XMARK FUND, LTD. 
  

	 By:
	 	 /s/ David Cavalier

	 	 	       Name: David Cavalier

	 	 	       Title: Chief Operating Officer

  

 33 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 XMARK FUND, L.P. 
  

	 By:
	 	 /s/ David Cavalier

	 	 	       Name: David Cavalier

	 	 	       Title: Chief Operating Officer

  

 34 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 PATIENCE PARTNERS, L.P. 
  

	 By:
	 	 /s/ Robert D. Van Roijen

	 	 	       Name: Robert D. Van Roijen

	 	 	       Title: General Partner

  

 35 

 [PURCHASER SIGNATURE PAGES TO REGISTRATION RIGHTS AGREEMENT] 
  
 ROBERT D. VAN ROIJEN 
  

	 By:
	 	 /s/ Robert D. Van Roijen

	 	 	       Name: Robert D. Van Roijen

  

 36 

 ANNEX A 
  

Plan of Distribution 
  
 The Selling Stockholders and any of their pledgees, assignees, donees and successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any 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. The Selling Stockholders 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; 

  

	 	•	 	settlement of short sales; 

  

	 	•	 	broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; 

  

	 	•	 	a combination of any such methods of sale; and 

  

	 	•	 	any other method permitted pursuant to applicable law. 

  
 The Selling Stockholders may also sell shares under Rule 144 under 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. The
Selling Stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved. 
  
 The Selling Stockholders may from time to time pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 

  

 37 

 
amending the list of Selling Stockholders to include the pledgee, transferee or other successors in interest as Selling Stockholders under this prospectus.

  
 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. The Selling Stockholders have informed the Company that it does not have any agreement or understanding, directly or
indirectly, with any person to distribute the Common Stock. 
  
 The Company is required to pay all fees and expenses incident to the registration of the shares. The Company and the Selling Stockholders have agreed to indemnify each other against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act. 
  

 38 

 EXHIBIT C 
  

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS 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 AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES 
  
 COMMON
STOCK PURCHASE WARRANT 
  
 To Purchase
             Shares of Common Stock of 
  
 Cortex Pharmaceuticals, Inc. 
  
 THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value received,              (the “Holder”), is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after August     , 2003 (the “Initial Exercise Date”) and on or prior to the close of business on August
    , 2008 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Cortex Pharmaceuticals Inc, a corporation incorporated in the State of Delaware (the “Company”),
up to              shares (the “Warrant Shares”) of Common Stock, par value $0.001 per share, of the Company (the “Common Stock”). The purchase
price of one share of Common Stock (the “Exercise Price”) under this Warrant shall be $2.55, subject to adjustment hereunder. The Exercise Price and the number of Warrant Shares for which the Warrant is exercisable shall be
subject to adjustment as provided herein. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated August 21, 2003,
between the Company and the purchasers signatory thereto. 
  

 1 

 1. Title to Warrant. Prior to the Termination Date and subject to compliance with applicable laws
and Section 7 of this Warrant, this Warrant and all rights hereunder are transferable, in whole or in part, at the office or agency of the Company by the Holder in person or by duly authorized attorney, upon surrender of this Warrant together with
the Assignment Form annexed hereto properly endorsed. The transferee shall sign an investment letter in form and substance reasonably satisfactory to the Company. 
  
 2. Authorization of Shares. The Company covenants that all Warrant Shares which may be issued upon the exercise of
the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges in respect of the
issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue). 
  
 3. Exercise of Warrant. 
  
 (a) Exercise of the purchase rights represented by this Warrant may be made at any time or times on or after the Initial Exercise Date and
on or before the Termination Date by the surrender of this Warrant and the Notice of Exercise Form annexed hereto duly executed, at the office of the Company (or such other office or agency of the Company as it may designate by notice in writing to
the registered Holder at the address of such Holder appearing on the books of the Company) and upon payment of the Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank or by means of a
cashless exercise pursuant to Section 3(d), the Holder shall be entitled to receive a certificate for the number of Warrant Shares so purchased. Certificates for shares purchased hereunder shall be delivered to the Holder within three (3) Trading
Days after the date on which this Warrant shall have been exercised as aforesaid. This Warrant shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and the Holder or any other person so
designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price and all taxes required to be paid by the
Holder, if any, pursuant to Section 5 prior to the issuance of such shares, have been paid. If the Company fails to deliver to the Holder a certificate or certificates representing the Warrant Shares pursuant to this Section 3(a) by the close of
business on the third Trading Day after the date of exercise, then the Holder will have the right to rescind such exercise. In addition to any other rights available to the Holder, if the Company fails to deliver to the Holder a certificate or
certificates representing the Warrant Shares pursuant to an exercise by the close of business on the third Trading Day after the date of exercise, and if after such third Trading Day the Holder is required by its broker to purchase (in an open
market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1) pay
in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the 
  

 2 

 
amount obtained by multiplying (A) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at
issue times (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having
a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (1) of the immediately preceding
sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In, together with applicable confirmations and other evidence
reasonably requested by the Company. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof. 
  
 (b) If this Warrant shall have been exercised in part, the
Company shall, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant. 
  
 (c) The Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 3(a) or otherwise, to the extent that after giving effect to such issuance after exercise, the Holder (together with
the Holder’s Affiliates), as set forth on the applicable Notice of Exercise, would beneficially own in excess of 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to such issuance. For purposes of the
foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (B)
exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Warrants) subject to a limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 3(c), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. For
purposes of this Section 3(c), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the
case may be, (y) a more recent public announcement by the Company or (z) any other notice by the Company or 
  

 3 

 
the Company’s Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of the Holder, the Company
shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Company Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The provisions of this Section 3(c) may be waived
by the Holder upon, at the election of the Holder, not less than 61 days’ prior notice to the Company, and the provisions of this Section 3(c) shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). 
  
 (d) If, but only if, at any time after one year from the
date of issuance of this Warrant there is no effective Registration Statement registering the resale of the Warrant Shares by the Holder, this Warrant may also be exercised at such time by means of a “cashless exercise” in which the Holder
shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where: 
  

	 	(A) =	 	the Closing Price on the Trading Day preceding the date of such election; 

  

	 	(B) =	 	the Exercise Price of the Warrants, as adjusted; and 

  

	 	(X) =	 	the number of Warrant Shares issuable upon exercise of the Warrants in accordance with the terms of this Warrant. 

  
 (e) Subject to the provisions of this Section 3, if after
the second anniversary of the Effective Date the Closing Price for each of any thirteen consecutive Trading Days (the “Measurement Price”, which period shall not have commenced until after such anniversary date) exceeds $6 (the
“Threshold Price”), subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement, then the Company
may, on one occasion and within two Trading Days of such period, call for cancellation of all or any portion of this Warrant for which a Notice of Exercise has not yet been delivered (such right, a “Call”). To exercise this right,
the Company must deliver to the Holder an irrevocable written notice (a “Call Notice”), indicating therein the portion of unexercised portion of this Warrant to which such notice applies. If the conditions set forth below for such
Call are satisfied from the period from the date of the Call Notice through and including the Call Date (as defined below), then any portion of this Warrant subject to such Call Notice for which a Notice of Exercise shall not have been received from
and after the date of the Call Notice will be cancelled at 6:30 p.m. (New York City time) on the twentieth Trading Day after the date the Call Notice is received by the Holder (such date, the “Call Date”). Any unexercised portion of
this Warrant to which the Call Notice does not pertain will be unaffected by such Call Notice. In furtherance thereof, the Company covenants and agrees that it will honor all Notices of Exercise with respect to Warrant Shares subject to a Call
Notice that are tendered from the time of delivery of the Call Notice through 6:30 p.m. (New York City time) on the 
  

 4 

 
Call Date. The parties agree that any Notice of Exercise delivered following a Call Notice shall first reduce to zero the number of Warrant Shares subject to
such Call Notice prior to reducing the remaining Warrant Shares available for purchase under this Warrant. For example, if (x) this Warrant then permits the Holder to acquire 100 Warrant Shares, (y) a Call Notice pertains to 75 Warrant Shares, and
(z) prior to 6:30 p.m. (New York City time) on the Call Date the Holder tenders a Notice of Exercise in respect of 50 Warrant Shares, then (1) on the Call Date the right under this Warrant to acquire 25 Warrant Shares will be automatically
cancelled, (2) the Company, in the time and manner required under this Warrant, will have issued and delivered to the Holder 50 Warrant Shares in respect of the exercises following receipt of the Call Notice, and (3) the Holder may, until the
Termination Date, exercise this Warrant for 25 Warrant Shares (subject to adjustment as herein provided and subject to subsequent Call Notices). Subject again to the provisions of this Section 10, the Company may deliver subsequent Call Notices for
any portion of this Warrant for which the Holder shall not have delivered a Notice of Exercise. Notwithstanding anything to the contrary set forth in this Warrant, the Company may not deliver a Call Notice or require the cancellation of this Warrant
(and any Call Notice will be void), unless, from the beginning of the 13 consecutive Trading Days used to determine whether the Common Stock has achieved the Threshold Price through the Call Date, (i) the Company shall have honored in accordance
with the terms of this Warrant all Notices of Exercise delivered by 6:30 p.m. (New York City time) on the Call Date, (ii) the Registration Statement shall be effective as to all Warrant Shares and the prospectus thereunder available for use by the
Holder for the resale all such Warrant Shares and (iii) the Common Stock shall be listed or quoted for trading on the Trading Market. The Company’s right to Call the Warrant shall be exercised ratably among the Purchasers based on each
Purchaser’s initial purchase of Common Stock pursuant to the Purchase Agreement. 
  
 4. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which Holder would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price. 
  
 5. Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the
Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such
name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder; and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. 
  

 5 

 6. Closing of Books. The Company will not close its stockholder books or records in any manner
which prevents the timely exercise of this Warrant, pursuant to the terms hereof. 
  
 7. Transfer, Division and Combination. 
  
 (a) Subject to compliance with any applicable securities laws and the conditions set forth in Sections 1 and 7(e) hereof and to the provisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights
hereunder are transferable, in whole or in part, so long as the amount of Warrant Shares transferred is equal to at least 50,000 shares (on a as-exercised basis) upon surrender of this Warrant at the principal office of the Company, together with a
written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant
issued.  
  
 (b) This Warrant may be
divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent
or attorney. Subject to compliance with Section 7(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice. 
  
 (c)
The Company shall prepare, issue and deliver at its own expense (other than transfer taxes) the new Warrant or Warrants under this Section 7. 
  
 (d) The Company agrees to maintain, at its aforesaid office, books for the registration and the registration of transfer of the Warrants.

  
 (e) If, at the time of the surrender of this
Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer (i) that the Holder or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel (which opinion shall be in form, substance and scope customary
for opinions of counsel in comparable transactions) to the effect that such transfer may be made without registration under the Securities Act and under applicable state securities or blue sky laws, (ii) that the holder or transferee execute and
deliver to the Company an investment letter in form and substance acceptable to the Company and (iii) that the transferee be an “accredited investor” as defined in Rule 501(a) promulgated under the Securities Act. 
  

 6 

 8. No Rights as Shareholder until Exercise. This Warrant does not entitle the Holder to any voting
rights or other rights as a shareholder of the Company prior to the exercise hereof. Upon the surrender of this Warrant and the payment of the aggregate Exercise Price (or by means of a cashless exercise), the Warrant Shares so purchased shall be
and be deemed to be issued to such Holder as the record owner of such shares as of the close of business on the later of the date of such surrender or payment. 
  

9. Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate. 
  
 10. Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a Saturday, Sunday or
legal holiday. 
  
 11. Adjustments of Exercise Price and Number
of Warrant Shares. The number and kind of securities purchasable upon the exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time upon the happening of any of the following. In case the Company shall (i)
pay a dividend in shares of Common Stock or make a distribution in shares of Common Stock to holders of its outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of Common Stock, or (iv) issue any shares of its capital stock in a reclassification of the Common Stock, then the number of Warrant Shares purchasable upon exercise of this Warrant
immediately prior thereto shall be adjusted so that the Holder shall be entitled to receive the kind and number of Warrant Shares or other securities of the Company which it would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof. Upon each such adjustment of the kind and number of Warrant Shares or other securities of the Company which are purchasable hereunder, the Holder shall thereafter be entitled to purchase the number of Warrant Shares or
other securities resulting from such adjustment at an Exercise Price per Warrant Share or other security obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares purchasable pursuant
hereto immediately prior to such adjustment and dividing by the number of Warrant Shares or other securities of the Company resulting from such adjustment. An adjustment made pursuant to this paragraph shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such event. 
  
 12. Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets. In case the Company shall reorganize its capital, reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there is a change in or distribution with respect to the Common Stock of the Company), or sell, transfer or otherwise dispose of all or substantially all its property, assets
or business to 
  

 7 

 another corporation and, pursuant to the terms of such reorganization, reclassification, merger, consolidation or
disposition of assets, shares of common stock of the successor or acquiring corporation, or any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition
to or in lieu of common stock of the successor or acquiring corporation (“Other Property”), are to be received by or distributed to the holders of Common Stock of the Company, then the Holder shall have the right thereafter to
receive upon exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event. In case of any such reorganization, reclassification, merger,
consolidation or disposition of assets, the successor or acquiring corporation (if other than the Company) shall expressly assume the due and punctual observance and performance of each and every covenant and condition of this Warrant to be
performed and observed by the Company and all the obligations and liabilities hereunder, subject to such modifications as may be deemed appropriate (as determined in good faith by resolution of the Board of Directors of the Company) in order to
provide for adjustments of Warrant Shares for which this Warrant is exercisable which shall be as nearly equivalent as practicable to the adjustments provided for in this Section 12. For purposes of this Section 12, “common stock of the
successor or acquiring corporation” shall include stock of such corporation of any class which is not preferred as to dividends or assets over any other class of stock of such corporation and which is not subject to redemption and shall also
include any evidences of indebtedness, shares of stock or other securities which are convertible into or exchangeable for any such stock, either immediately or upon the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The foregoing provisions of this Section 12 shall similarly apply to successive reorganizations, reclassifications, mergers, consolidations or disposition of assets. 

 
 13. Voluntary Adjustment by the Company. The Company may at any
time during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company. 
  
 14. Notice of Adjustment. Whenever the number of Warrant Shares or number or kind of securities or other property
purchasable upon the exercise of this Warrant or the Exercise Price is adjusted, as herein provided, the Company shall give notice thereof to the Holder, which notice shall state the number of Warrant Shares (and other securities or property)
purchasable upon the exercise of this Warrant and the Exercise Price of such Warrant Shares (and other securities or property) after such adjustment, setting forth a brief statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. 
  
 15. Notice
of Corporate Action. If at any time: 
  
 (a)
the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other distribution, or any right to subscribe for or purchase any evidences of its indebtedness, any shares of stock of any
class or any other securities or property, or to receive any other right, or 
  

 8 

 (b) there shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or merger of the Company with, or any sale, transfer or other disposition of all or substantially all the property, assets or business of the Company to, another corporation
or, 
  
 (c) there shall be a voluntary or
involuntary dissolution, liquidation or winding up of the Company; 
  
 then, in
any one or more of such cases, the Company shall give to Holder (i) at least 15 days’ prior written notice of the date on which a record date shall be selected for such dividend, distribution or right or for determining rights to vote in
respect of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, liquidation or winding up, and (ii) in the case of any such reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least 15 days’ prior written notice of the date when the same shall take place. Such notice in accordance with the foregoing clause also shall specify (i) the date on which any such record
is to be taken for the purpose of such dividend, distribution or right, the date on which the holders of Common Stock shall be entitled to any such dividend, distribution or right, and the amount and character thereof, and (ii) the date on which any
such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up is to take place and the time, if any such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares for securities or other property deliverable upon such disposition, dissolution, liquidation or winding up. Each such written notice shall be sufficiently given if addressed to Holder at the last address of
Holder appearing on the books of the Company and delivered in accordance with Section 17(d). Failure to provide such notice shall not affect the validity of any action taken in connection with such dividend, distribution, subscription or purchase
rights, or proposed reorganization, reclassification, recapitalization, merger, consolidation, sale, transfer, disposition, conveyance, dissolution, liquidation or winding up. 
  
 16. Authorized Shares. The Company covenants that during the period the Warrant is outstanding, it will reserve from
its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant
shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The
Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the
Common Stock may be listed. 
  
 Except and to the extent as
waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation 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
actions as may be 
  

 9 

 necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without
limiting the generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts to obtain all such authorizations, exemptions
or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant. 
  

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise
Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof. 
  
 17. Miscellaneous. 
  
 (a) Jurisdiction. This Warrant shall constitute a
contract under the laws of New York, without regard to its conflict of law, principles or rules. 
  
 (b) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered,
will have restrictions upon resale imposed by state and federal securities laws. 
  
 (c) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder. 
  
 (d) Notices. Any notice, request or other document required or permitted to be given or delivered to
the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement; provided upon any permitted assignment of this Warrant, the assignee shall promptly provide the Company with its contact information.

  
 (e) Limitation of Liability. No
provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant or purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. 
  

 10 

 (f) Remedies. Holder, in addition to being entitled to exercise all rights granted
by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 
  
 (g) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant Shares. 
  
 (h) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder. 
  
 (i) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of this Warrant. 
  
 (j) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant. 
  
 ******************** 
  

 11 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly
authorized. 
  
 Dated: August     , 2003 
  

	 CORTEX PHARMACEUTICALS, INC.

		
	 By:
	 	  

	 	 	 Name:

	 	 	 Title:

  

 12 

 NOTICE OF EXERCISE 
  
 To: Cortex Pharmaceuticals, Inc. 
  
 (1) The undersigned hereby elects to purchase _______Warrant Shares of Cortex Pharmaceuticals, Inc. pursuant to the terms of the attached Warrant (only if
exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any. 
  
 (2) Payment shall take the form of (check applicable box): 
  
 [    ] in lawful money of the United States; or 
  
 [    ] the cancellation of such number of Warrant Shares as is necessary, in accordance with the
formula set forth in subsection 3(d), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 3(d). 
  
 (3) Please issue a certificate or certificates representing said Warrant
Shares in the name of the undersigned or in such other name as is specified below: 
  
 _______________ 
  
 The Warrant Shares shall be
delivered to the following: 
  
 _______________ 
  
 _______________ 
  
 _______________ 
  
 (4) Accredited Investor. The undersigned is an “accredited
investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended. 
  

	[PURCHASER]
	
	 By:________________

	 	 	     Name:

	 	 	     Title:

	
	 Dated:________________

 ASSIGNMENT FORM 
  
 (To assign the foregoing warrant, execute 
 this form and supply required information. 
 Do not use this form to exercise the warrant.) 
  
 FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to 
  
                                       
                                        
   whose address is 
  
                                       
                                        
                              . 
  
  
                                       
                                        
                               
  
 Dated:
                ,              
  

	 	  	 Holder’s Signature:
	  	  

	  	 
	 	  	 Holder’s Address:
	  	  

	  	 
	 	  	 	  	  

	  	 

  
 Signature Guaranteed:
                                        
                             
  
 NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or
enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing
Warrant. 

 CALL NOTICE 
  
 (To be delivered upon exercise of a Call) 
  
 Subject to the terms of the Warrant certificate, Cortex Pharmaceuticals, Inc., by signature of its authorized representative
below, hereby elects to exercise its right to Call the Warrant, as more particularly described in Section 3(e) of the Warrant Certificate, as to             % of the Warrant
effective             , 200  , which shall be deemed the Call Date. 
  

	 Dated:
	 	 Cortex Pharmaceuticals, Inc.

			
	 	 	 By:
	 	  

	 	 	 Its:2002 Stock Option Plan as Amended and ISO Plan

 Exhibit 10.2 
  
 VARITEK INDUSTRIES, INC. 
  
 2002 STOCK OPTION PLAN 
 AS AMENDED
2003 
  
 1. Purpose. 
  
 (a) The purpose of this 2002 Stock Option Plan, as amended 2003 (the
“Plan”) of Varitek Industries, Inc., a Texas corporation, is to provide a means by which key Employees and Directors of and Consultants to the Company and its Affiliates may be given an opportunity to purchase Common Stock of the Company.

  
 (b) The Company, by means of the Plan, seeks to retain the
services of persons who are now Employees or Directors of or Consultants to the Company or its Affiliates, to secure and retain the services of new Employees, Directors and Consultants, and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its Affiliates. 
  
 (c)
The Company intends that the Options issued under the Plan shall be Nonstatutory Stock Options. All Options shall be in such form as issued pursuant to Section 6 hereof and a separate certificate or certificates will be issued for shares purchased
upon exercise of each Option. 
  
 2. Definitions. 
  
 (a) “Affiliate” means any parent or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f) respectively, of the Code. 
  
 (b) “Board” means the Board of Directors of the Company. 
  
 (c) “Code” means the Internal Revenue Code of 1986. 
  
 (d) “Committee” means a Committee appointed by the Board in accordance with subsection 3(c) of the Plan.

  
 (e) “Common Stock” means the Company’s common
stock, no par value. 
  
 (f) “Company” means Varitek
Industries, Inc., a Texas corporation. 
  
 (g)
“Consultant” means any person, including an advisor, engaged by the Company or an Affiliate to render consulting services and who is compensated for such services. 
  
 (h) “Continuous Status as an Employee, Director or Consultant” means the employment of the Employee or
relationship as a Director or Consultant is not interrupted or terminated. The Board, in its sole discretion, may determine whether Continuous Status as an Employee, Director or Consultant shall be considered interrupted in the case of: (i) any
leave of absence approved by the Board, including sick leave, military leave or any other personal leave; 

 or (ii) transfers between locations of the Company or among the Company, Affiliates and their successors. 
  
 (i) “Director” means a member of the Board. 
  
 (j) “Employee” means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company. 
  
 (k) “Exchange Act” means the Securities Exchange Act of 1934, as
amended. 
  
 (l) “Fair Market Value” means the value of
the Common Stock of the Company as determined in good faith by the Board. 
  
 (m) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 
  
 (n) “Officer” means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 
  
 (o) “Option” means a stock option granted pursuant to the Plan. 
  
 (p) “Option Agreement” means a written agreement between the Company and an Optionee evidencing the terms and
conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan. 
  
 (q) “Optionee” means an Employee, Director or Consultant who holds an outstanding Option. 
  
 (r) “Plan” means this Stock Option Plan. 
  
 (s) “Rule 16a-12” means Rule 16a-12 under the Exchange Act or any
successor to Rule 16a-12. 
  
 (t) “Securities Act” means
the Securities Act of 1933, as amended. 
  
 3. Administration. 

 
 (a) The Plan shall be administered by the Board unless and until the
Board delegates administration to a Committee, as provided in subsection 3(c). 
  
 (b) The Board shall have the power, subject to and within the limitations of the express provisions of the Plan: 
  

 2 

 (i) To determine from time to time which of the persons eligible under the Plan shall be
granted Options; when and how each Option shall be granted; the provisions of each Option granted (which need not be identical), including the exercise price of such Option and time or times such Option may be exercised in whole or in part; and the
number of shares for which an Option shall be granted to each such person. 
  
 (ii) To construe and interpret the Plan and Options granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board in the exercise of this power may correct any defect,
omission or inconsistency in the Plan or in any Option Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. 
  
 (iii) To amend the Plan or an Option as provided in Section 11. 
  
 (iv) Generally, to exercise such powers and to perform such
acts as the Board deems necessary or expedient to promote the best interests of the Company. 
  
 (c) The Board may delegate administration of the Plan to a Committee composed of not fewer than two members of the Board. If administration is delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board (and references in this Plan to the Board shall thereafter be to the Committee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as
may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. 
  
 4. Shares Subject to the Plan. 
  
 (a) Subject to the provisions of Section 10 relating to adjustments upon changes in stock, the stock that may be sold pursuant to Options shall be Common
Stock of the Company and shall not exceed in the aggregate 4,800,000 shares of Common Stock of the Company. If any Option shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the Common
Stock not purchased under such Option shall revert to and again become available for issuance under the Plan. 
  
 (b) The Common Stock subject to the Plan may be unissued shares or reacquired shares purchased on the market or otherwise. 
  
 5. Eligibility. All Employees and Directors of and Consultants to the Company and its
Affiliates are eligible to participate in the Plan. 
  
 6. Option
Provisions. Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of
provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions: 
  

 3 

 (a) Term. No Option shall be exercisable after the expiration of ten years from the date it was
granted. 
  
 (b) Price. The exercise price of each Option
shall be as determined in the discretion of the Board. 
  
 (c)
Consideration. The purchase price of Common Stock acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the time the Option is exercised, or (ii) at the discretion
of the Board or the Committee, at the time of either the grant or the exercise of the Option, (A) by delivery to the Company of other Common Stock of the Company, (B) according to a deferred payment or other arrangement (which may include, without
limiting the generality of the foregoing, the use of other Common Stock of the Company) with the person to whom the Option is granted or to whom the Option is transferred pursuant to subsection 6(d), or (C) in any other form of legal consideration
that may be acceptable to the Board. In the case of any deferred payment arrangement, interest shall be payable at least annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as interest under any applicable
provisions of the Code of any amounts other than amounts stated to be interest under the deferred payment arrangement. 
  
 (d) Transferability. An Option shall not be transferable except by will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order satisfying the requirements of Rule 16a-12 (a “QDRO”), and shall be exercisable during the lifetime of the person to whom the Option is granted only by such person or any transferee pursuant to a QDRO. The person
to whom the Option is granted may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionee, shall thereafter be entitled to exercise the Option.

  
 (e) Vesting. The total number of shares of Common Stock
subject to an Option may, but need not, be allotted in periodic installments (which may, but need not, be equal). The Option Agreement may provide that from time to time during each of such installment periods the Option may become exercisable
(“vest”) with respect to some or all of the shares allotted to that period, and may be exercised with respect to some or all of the shares allotted to such period and/or any prior period as to which the Option became vested but was not
fully exercised. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Board may deem appropriate. The provisions of this subsection
are subject to any Option provisions governing the minimum number of shares as to which an Option may be exercised. 
  
 (f) Securities Law Compliance. The Company may require any Optionee, or any person to whom an Option is transferred under subsection 6(d), as a
condition of exercising any such Option, (1) to give written assurances satisfactory to the Company as to the Optionee’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably
satisfactory to the Company who is knowledgeable and experienced in financial and business matters, and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Option; and
(2) to give written assurances satisfactory to the Company stating that such person is acquiring the Common Stock 
  

 4 

 subject to the Option for such person’s own account and not with any present intention of selling or otherwise
distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (i) the issuance of the shares upon the exercise of the Option has been registered under a then currently
effective registration statement under the Securities Act, or (ii) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities
laws. The Company may, upon advice of counsel to the Company, place legends on Common Stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not
limited to, legends restricting the transfer of the Common Stock. 
  
 (g) Termination of Employment or Relationship as a Director or Consultant. In the event an Optionee’s Continuous Status as an Employee, Director or Consultant terminates (other than upon the Optionee’s death or disability),
the Optionee may exercise his or her Option (to the extent that the Optionee was entitled to exercise it at the date of termination) but only within such period of time ending on the earlier of (i) the date three months after the termination of the
Optionee’s Continuous Status as an Employee, Director or Consultant, or such longer or shorter period specified in the Option Agreement, or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after
termination, the Optionee does not exercise his or her Option within the time specified in the Option Agreement, the Option shall terminate, and the Common Stock covered by such Option shall revert to and again become available for issuance under
the Plan. 
  
 (h) Disability of Optionee. In the event an
Optionee’s Continuous Status as an Employee, Director or Consultant terminates as a result of the Optionee’s disability, which the Board may define, the Optionee may exercise his or her Option (to the extent that the Optionee was entitled
to exercise it at the date of termination), but only within such period of time ending on the earlier of (i) the date twelve months following such termination (or such longer or shorter period specified in the Option Agreement), or (ii) the
expiration of the term of the Option as set forth in the Option Agreement. If, at the date of termination, the Optionee is not entitled to exercise his or her entire Option, the Common Stock covered by the unexercisable portion of the Option shall
revert to and again become available for issuance under the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Common Stock covered by such Option shall
revert to and again become available for issuance under the Plan. 
  
 (i) Death of Optionee. In the event of the death of an Optionee during, or within a period specified in the Option Agreement after the termination of, the Optionee’s Continuous Status as an Employee, Director or Consultant, the
Option may be exercised (to the extent the Optionee was entitled to exercise the Option at the date of death) by the Optionee’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person
designated to exercise the option upon the Optionee’s death pursuant to subsection 6(d), but only within the period ending on the earlier of (i) the date eighteen months following the date of death (or such longer or shorter period specified in
the Option Agreement), or (ii) the expiration of the term of such Option as set forth in the Option Agreement. If, at the time of death, the Optionee was not entitled to exercise his or her entire Option, the Common Stock covered by the 

 

 5 

 unexercisable portion of the Option shall revert to and again become available for issuance under the Plan. If, after
death, the Option is not exercised within the time specified herein, the Option shall terminate, and the Common Stock covered by such Option shall revert to and again become available for issuance under the Plan. 
  
 (j) Early Exercise. The Option may, but need not, include a provision
whereby the Optionee may elect at any time while an Employee, Director or Consultant to exercise the Option as to any part or all of the Common Stock subject to the Option prior to the full vesting of the Option. Any unvested Common Stock so
purchased may be subject to a repurchase right in favor of the Company or to any other restriction the Board determines to be appropriate. 
  
 (k) Withholding. To the extent provided by the terms of an Option Agreement, the Optionee may satisfy any federal, state or local tax withholding
obligation relating to the exercise of such Option by any of the following means or by a combination of such means: (1) tendering a cash payment; (2) authorizing the Company to withhold shares from the shares of the Common Stock of the Company
otherwise issuable to the participant as a result of the exercise of the option; or (3) delivering to the Company owned and unencumbered shares of the Common Stock of the Company. 
  
 7. Covenants of the Company. 
  
 (a) During the terms of the Options, the Company shall keep reserved and available at all times the number of shares of Common Stock which may be
purchased pursuant to the exercise of such Options. 
  
 (b) The
Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to issue and sell shares of Common Stock upon exercise of the Options; provided however, that this
undertaking shall not require the Company to register under the Securities Act either the Plan, any Option or any Common Stock issued or issuable pursuant to any such Option. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common
Stock upon exercise of such Options unless and until such authority is obtained. 
  
 8. Use of Proceeds from Sale of Stock. Proceeds from the sale of Common Stock pursuant to the exercise of Options shall constitute general funds of the Company. 
  
 9. Miscellaneous. 
  
 (a) The Board shall have the power to accelerate the time at which an Option may first be exercised or the time during which an Option or any part thereof
will vest pursuant to subsection 6(e), notwithstanding the provisions in the Option stating the time at which it may first be exercised or the time during which it will vest. 
  

 6 

 (b) Neither an Optionee nor any person to whom an Option is transferred under subsection 6(d) shall be
deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Option unless and until such person has satisfied all requirements for exercise of the Option pursuant to its terms.

  
 (c) Nothing in the Plan or any instrument executed or Option
granted pursuant thereto shall confer upon any Employee, Director, Consultant or Optionee any right to continue in the employ of the Company or any Affiliate (or to continue acting as a Director or Consultant) or shall affect the right of the
Company or any Affiliate to terminate the employment or relationship as a Director or Consultant of any Employee, Director, Consultant or Optionee with or without cause. 
  
 (d) The Board or the Committee shall have the authority to effect, at any time and from time to time (i) the repricing of
any outstanding Options under the Plan to reduce the exercise price of such Options and/or (ii) with the consent of the affected holders of Options, the cancellation of any outstanding Options and the grant in substitution therefor of new Options
under the Plan covering the same or different numbers of shares of Common Stock. 
  
 10. Adjustments Upon Changes in Stock. 
  
 (a) If
any change is made in the Common Stock subject to the Plan, or subject to any Option (through merger, consolidation, reorganization, recapitalization, stock dividend, dividend in property other than cash, stock split, liquidating dividend,
combination of shares, exchange of shares, change in corporate structure or otherwise), the Plan will be appropriately adjusted in the classes and maximum number of Common Stock shares subject to the Plan pursuant to subsection 4(a) and the
outstanding Options will be appropriately adjusted in the class(es) and number of shares and price per share of Common Stock subject to such outstanding Options. 
  
 (b) In the event of: (1) a sale of substantially all of the assets of the Company; (2) a merger or consolidation in which
the Company is not the surviving corporation; (3) a reverse merger in which the Company is the surviving corporation but the shares of the Company’s Common Stock outstanding immediately preceding the merger are converted by virtue of the merger
into other property, whether in the form of securities, cash or otherwise, or (4) any other capital reorganization in which the Company’s shareholders receive less than fifty percent of the outstanding voting shares of the new or surviving
corporation, then the time during which such Options may be exercised shall be accelerated to permit the Optionee to exercise all such Options in full prior to such event, and the Options shall terminate if not exercised prior to such event. In the
event that any such accelerated option vesting received or to be received by an Optionee pursuant to this subsection 10(b) (the “Benefit”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code
and (ii) but for this subsection 10(b), be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Benefit shall be reduced to the extent necessary so that no portion of the Benefit will be subject to
the Excise Tax, as determined in good faith by the Company; provided, however, that if, in the absence of any such reduction (or after such reduction), the Optionee believes that the Benefit or any portion thereof (as reduced, if applicable) would
be subject to the Excise Tax, the Benefit shall be reduced (or further reduced) to the extent determined by the Optionee in his or her 
  

 7 

 discretion so that the Excise Tax would not apply. If, notwithstanding any such reduction (or in the absence of such
reduction), the Internal Revenue Service (“IRS”) determines that the Optionee is liable for the Excise Tax as a result of the Benefit, then the Optionee shall be obligated to return to the Company, within thirty days of such determination
by the IRS, a portion of the Benefit sufficient such that none of the Benefit retained by the Optionee constitutes a “parachute payment” within the meaning of Code Section 280G that is subject to the Excise Tax. 
  
 11. Amendment of the Plan and Options. 
  
 (a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 10 relating to adjustments upon changes in stock, no amendment shall be effective unless approved by the stockholders of the Company within twelve months before or after the adoption of the amendment, where the
amendment will: 
  
 (i) Increase the number of
shares of Common Stock reserved for Options under the Plan; or 
  
 (ii) Modify the Plan in any other way if such modification requires stockholder approval in order for the Plan to comply with any regulatory requirements. 
  
 (b) The Board may in its sole discretion submit any other amendment to the Plan for stockholder approval, including, but not
limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations promulgated thereunder regarding the exclusion of performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers. 
  
 (c) Rights
and obligations under any Option granted before amendment of the Plan shall not be altered or impaired by any amendment of the Plan unless (i) the Company requests the consent of the person to whom the Option was granted and (ii) such person
consents in writing. 
  
 (d) The Board at any time, and from time
to time, may amend the terms of any one or more Options; provided however, that the rights and obligations under any Option shall not be altered or impaired by any such amendment unless (i) the Company requests the consent of the person to
whom the Option was granted and (ii) such person consents in writing. 
  
 12.
Termination or Suspension of the Plan. 
  
 (a) The Board
may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on the ten year anniversary of the date the Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier. No
Options may be granted under the Plan while the Plan is suspended or after it is terminated. 
  

 8 

 (b) Rights and obligations under any Option granted while the Plan is in effect shall not be altered or
impaired by suspension or termination of the Plan, except with the consent of the person to whom the Option was granted. 
  
 13. Effective Date of Plan. The Plan shall become effective as determined by the Board. 
  

 9 

 VARITEK INDUSTRIES, INC. 
  
 INCENTIVE STOCK OPTION PLAN 
  

ARTICLE I  
 ESTABLISHMENT AND
PURPOSE 
  
 Section 1.1. Establishment. Varitek
Industries, Inc., a Texas corporation (the “Company”), hereby establishes a stock option plan for employees providing material services to the Company or any subsidiary of the Company as described herein, which shall be known as the
“VARITEK INDUSTRIES, INC. INCENTIVE STOCK OPTION PLAN” (the “Plan”). It is intended that the options issued to employees pursuant to the Plan constitute incentive stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended. The Company shall enter into stock option agreements with recipients of options pursuant to the Plan. 
  
 Section 1.2. Purpose. The purpose of the Plan is to enhance shareholder value by attracting, retaining and motivating key employees of the Company
and of any subsidiary of the Company by providing them with a means to acquire a proprietary interest in the Company’s success. 
  
 ARTICLE II  
 DEFINITIONS

  
 Section 2.1. Definitions. Whenever used herein,
the following terms shall have the respective meanings set forth below, unless the context clearly requires otherwise, and when such meaning is intended, the term shall be capitalized. 
  
 (a) “Board” means the Board of Directors of the Company. 
  
 (b) “Code” means the Internal Revenue Code of 1986, as amended.

  
 (c) “Committee” shall mean the Committee provided
for by Article IV hereof, which may be created at the discretion of the Board. 
  
 (d) “Company” means Varitek Industries, Inc, a Texas corporation. 
  
 (e) “Date of Exercise” means the date the Company receives notice, by an Optionee, of the exercise of an Option pursuant to Section 8.1 of the
Plan. Such notice shall indicate the number of shares of Stock the Optionee intends to acquire pursuant to exercise of the Option. 
  
 (f) “Employee” means any person, including an officer or director of the Company or a Subsidiary Corporation, who is employed by the Company or
a Subsidiary Corporation. 

 (g) “Fair Market Value” means the fair market value of Stock upon which an option is granted
under the Plan, determined as follows: 
  
 (i) If the Stock is
listed on a national securities exchange or admitted to unlisted trading privileges on such exchange, the Fair Market Value shall be the last reported sale price of the Stock on the composite tape of such exchange on the date of issuance of this
option, or if such day is not a normal trading day, the last trading day prior to the date of issuance of this option, and if no such sale is made on such day, the Fair Market Value shall be the average closing bid and asked prices for such day on
the composite tape of such exchange; or 
  
 (ii) If the Stock is
not so listed or admitted to unlisted trading privileges, the Fair Market Value shall be the mean of the last reported bid and asked prices reported by the National Association of Securities Dealers Quotation System (or, if not so quoted on NASDAQ,
by the National Quotation Bureau, Inc.) on the last trading day prior to the date of issuance of the option. 
  
 (h) “Incentive Stock Option” means an Option granted under the Plan which is intended to qualify as an “incentive stock option”
within the meaning of Section 422 of the Code. 
  
 (i)
“Option” means the right, granted under the Plan, to purchase Stock of the Company at the option price for a specified period of time. 
  
 (j) “Optionee” means an Employee holding an Option under the Plan. 
  
 (k) “Parent Corporation” shall have the meaning set forth in Section 424(e) of the Code with the Company being
treated as the employer corporation for purposes of this definition. 
  
 (l) “Subsidiary Corporation” shall have the meaning set forth in Section 424(f) of the Code with the Company being treated as the employer corporation for purposes of this definition. 
  
 (m) “Significant Shareholder” means an individual who, within the
meaning of Section 422(b)(6) of the Code, owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company or of any Parent Corporation or Subsidiary Corporation of the Company. In determining
whether an individual is a Significant Shareholder, an individual shall be treated as owning stock owned by certain relatives of the individual and certain stock owned by corporations in which the individual is a shareholder, partnerships in which
the individual is a partner, and estates or trusts of which the individual is a beneficiary, all as provided in Section 424(d) of the Code. 
  
 (n) “Stock” means the no par value common stock of the Company. 
  

 2 

 Section 2.2. Gender and Number. Except when otherwise indicated by the context, any masculine
terminology when used in the Plan also shall include the feminine gender, and the definition of any term herein in the singular also shall include the plural. 
  

ARTICLE III 
 ELIGIBILITY AND
PARTICIPATION 
  
 All Employees are eligible to participate in
the Plan and receive Incentive Stock Options under the Plan. Optionees in the Plan shall be selected by the Board, in its sole discretion, from among those Employees who, in the opinion of the Board, are in a position to contribute materially to the
Company’s continued growth and development and to its long-term financial success. 
  
 ARTICLE IV 
 ADMINISTRATION 
  
 The Board shall be responsible for administering the Plan. 
  
 (a) The Board is authorized to interpret the Plan; to prescribe, amend, and rescind rules and regulations relating to the
Plan; to provide for conditions and assurances deemed necessary or advisable to protect the interests of the Company; and to make all other determinations necessary or advisable for the administration of the Plan. Determinations, interpretations, or
other actions made or taken by the Board with respect to the Plan and Options granted under the Plan shall be final and binding and conclusive for all purposes and upon all persons. 
  
 (b) At the discretion of the Board the Plan may be administered by a Committee of two or more non-employee Directors
appointed by the Board (the “Committee”). The Committee shall have full power and authority, subject to the limitations of the Plan and any limitations imposed by the Board, to construe, interpret and administer the Plan and to make
determinations which shall be final, conclusive and binding upon all persons, including any persons having any interests in any Options which may be granted under the Plan, and, by resolution or resolutions to provide for the creation and issuance
of any Option, to fix the terms upon which, the time or times at or within which, and the price or prices at which any shares of Stock may be purchased from the Company upon the exercise of an Option. Such terms, time or times and price or prices
shall, in every case, be set forth or incorporated by reference in the instrument or instruments evidencing an Option, and shall be consistent with the provisions of the Plan. 
  
 (c) Where a Committee has been created by the Board pursuant to this Article IV, references in the Plan to actions to be
taken by the Board shall be deemed to refer to the Committee as well, except where limited by the Plan or by the Board. 
  
 (d) No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Option
granted under it. 
  

 3 

 ARTICLE V 
 STOCK SUBJECT TO THE PLAN 
  
 Section 5.1. Number. The total number of shares of Stock hereby made available and reserved for issuance under the Plan upon exercise of Options shall be 200,000 shares. The aggregate number of shares of Stock available under the
Plan shall be subject to adjustment as provided in Section 5.3. 
  
 Section 5.2. Unused Stock. If an Option shall expire or terminate for any reason without having been exercised in full, the unpurchased shares of Stock subject thereto shall (unless the Plan shall have terminated) become available
for other Options under the Plan. 
  
 Section 5.3. Adjustment
in Capitalization. In the event of any change in the outstanding shares of Stock by reason of a stock dividend or split, recapitalization, reclassification, or other similar capital change, the aggregate number of shares of Stock set forth in
Section 5.1 shall be appropriately adjusted by the Board, whose determination shall be conclusive. In any such case, the number and kind of shares of Stock that are subject to any Option and the Option price per share shall be proportionately and
appropriately adjusted without any change in the aggregate Option price to be paid therefor upon exercise of the Option. 
  
 ARTICLE VI 
 DURATION OF THE PLAN

  
 Subject to approval of shareholders, the Plan shall be in
effect for ten years from the date of its adoption by the Board. Any Options outstanding at the end of such period shall remain in effect in accordance with their terms. The Plan shall terminate before the end of such period if all Stock subject to
it has been purchased pursuant to the exercise of Options granted under the Plan. 
  
 ARTICLE VII 
 TERMS OF STOCK OPTIONS 
  
 Section 7.1. Grant of Options. Subject to Section 5.1, Options may be
granted to Employees at any time and from time to time as determined by the Board. The Board shall have complete discretion in determining the terms and conditions and number of Options granted to each Optionee. In making such determinations, the
Board may take into account the nature of services rendered by such Employees, their present and potential contributions to the Company and its Subsidiary Corporations, and such other factors as the Board in its discretion shall deem relevant. The
Board is expressly given the authority to issue amended or replacement Options with respect to shares of Stock subject to an Option previously granted hereunder, subject to the provisions of Section 7.7 which prohibit the repricing of any
outstanding Option after the grant thereof to provide for a lower Option exercise price without shareholder approval. An amended Option amends the terms of an Option previously granted and thereby supersedes the previous Option. A replacement Option
is similar to a new Option granted hereunder except that it provides that it shall be forfeited to the extent that a previously granted Option is exercised, or except that its issuance is conditioned upon the termination of a previously granted
Option. 
  
 Section 7.2. No Tandem Options. Where an Option
granted under the Plan is intended to be an Incentive Stock Option, the Option shall not contain terms pursuant to which the 
  

 4 

 exercise of the Option would affect the Optionee’s right to exercise another Option, or vice versa, such that the
Option intended to be an Incentive Stock Option would be deemed a tandem stock option within the meaning of the regulations under Section 422 of the Code. 
  
 Section 7.3. Option Agreement; Terms and Conditions to Apply Unless Otherwise Specified. As determined by the Board on the date of grant, each
Option shall be evidenced by an Option agreement (the “Option Agreement”) that includes the non-transferability provisions required by Section 10.2 hereof and that specifies: the Option price; the duration of the Option; the number of
shares of Stock to which the Option applies; such vesting or exercisability restrictions which the Board may impose and any other terms or conditions which the Board may impose. All such terms and conditions shall be determined by the Board at the
time of grant of the Option. 
  
 (a) If not otherwise specified
by the Board, the following terms and conditions shall apply to Options granted under the Plan: 
  
 (i) Term. The duration of the Option shall be for ten years from the date of grant. 
  
 (ii) Exercise of Option. Unless an Option is terminated as provided hereunder, an Optionee may exercise an Option
pursuant to a vesting and exercisability schedule as determined by the Board, which vesting and exercisability schedule shall provide that an Option held by an Optionee who terminates his employment with the Company for reasons other than death,
permanent and total disability, or termination of employment by the Company for cause shall upon such termination become exercisable to the extent vested immediately prior to such termination. 
  
 (iii) Termination. Each Option granted pursuant to the Plan shall
expire upon the earliest to occur of: 
  
 (A) The date set forth
in such Option, not to exceed ten years from the date of grant (five years in the case of a Significant Shareholder); 
  
 (B) The completion of the merger or sale of substantially all of the Stock or assets of the Company with or to another company in a transaction in which
the Company is not the survivor, except for the merger of the Company into a wholly-owned subsidiary and, provided that the Company shall have given the Optionee at least thirty days’ prior written notice of its intent to enter into such merger
or sale (and the Company shall not be considered the surviving corporation for purposes hereof if the Company is the survivor of a reverse triangular merger); 
  

 5 

 (C) Ninety days following the termination of the employment of an Optionee, except for termination for
cause by the Company or termination because of the Optionee’s death or disability (in which event of termination of employment due to the Optionee’s death or disability, the Option shall expire one year following the termination of
employment of an Optionee); or 
  
 (D) Immediately upon the
termination of the employment of an Optionee by the Company for cause. 
  
 (iv) Acceleration. An Option shall become fully vested and exercisable irrespective of its other provisions (A) immediately prior to the completion of the merger or sale of substantially all of the stock or
assets of Company in a transaction in which the Company is not the survivor, except for the merger of the Company into a wholly-owned subsidiary (and the Company shall not be considered the surviving corporation for purposes hereof if the Company is
the survivor of a reverse triangular merger); or (B) upon termination of the Optionee’s employment with the Company or a Subsidiary Corporation because of death, disability or normal retirement upon reaching the age of sixty-five. 

 
 (v) Nontransferability. All Options granted under the Plan shall
be nontransferable by the Optionee, other than by will or the laws of descent and distribution, and shall be exercisable during the Optionee’s lifetime only by the Optionee. 
  
 (b) The Board shall be free to specify terms and conditions other than and in addition to those set forth above, in its
discretion. 
  
 (c) All Option Agreements shall incorporate the
provisions of the Plan by reference. 
  
 Section 7.4. Option
Price. No Option granted pursuant to the Plan shall have an Option price that is less than the Fair Market Value of Stock on the date the Option is granted. Incentive Stock Options granted to Significant Shareholders shall have an Option price
of not less than 110% of the Fair Market Value of Stock on the date of grant. The Option exercise price shall be subject to adjustment as provided in Section 5.3 above. 
  
 Section 7.5. $100,000 Per Year Limitation. To the extent that the aggregate fair market value of Stock (determined as
of the time the option with respect to such Stock is granted) with respect to which Incentive Stock Options are exercisable for the first time by any Optionee during any calendar year (under this Plan and all other plans of the Company and any
Parent Company or Subsidiary Corporation) exceeds $100,000, such options shall be treated as options which are not Incentive Stock Options. The foregoing provision shall be applied by taking options into account in the order in which they were
granted. 
  

 6 

 Section 7.6. Payment. Payment for all shares of Stock shall be made at the time that an Option, or
any part thereof, is exercised, and no shares shall be issued until full payment therefor has been made. Payment shall be made (i) in cash, or (ii) if acceptable to the Board, in Stock or in some other form; provided, however, in the case of an
Incentive Stock Option, that such other form of payment does not prevent the Option from qualifying for treatment as an “incentive stock option” within the meaning of the Code. 
  
 Section 7.7. No Repricing Without Shareholder Approval. No outstanding Option shall be repriced after the grant
thereof to provide for a lower Option exercise price, whether through adjustment or amendment to the Option exercise price, issuance of an amended Option, cancellation of the Option and issuance of a replacement Option, or by any other means with
substantially the same economic effect, without approval of the shareholders. 
  
 ARTICLE VIII 
 WRITTEN NOTICE, ISSUANCE OF STOCK 
 CERTIFICATES, SHAREHOLDER PRIVILEGES 
  
 Section 8.1. Written Notice. An Optionee wishing to exercise an Option shall give written notice to the Company, in the form and manner prescribed
by the Board. Full payment for the shares of Stock to be acquired pursuant to the exercise of the Option must accompany the written notice. 
  
 Section 8.2. Issuance of Stock Certificates. As soon as practicable after the receipt of written notice and payment, the Company shall deliver to
the Optionee a certificate or certificates for the requisite number of shares of Stock. 
  
 Section 8.3. Privileges of a Shareholder. An Optionee or any other person entitled to exercise an Option under the Option Agreement shall not have shareholder privileges with respect to any Stock covered by the
Option until the date of issuance of a stock certificate for such Stock. 
  
 ARTICLE IX 
 TERMINATION OF EMPLOYMENT OR SERVICES 
  
 Section 9.1. Death or Disability. Subject to any prior partial exercise of the Option, if an Optionee’s
employment terminates by reason of Optionee’s death or permanent and total disability, the Option may be exercised up to one hundred percent of the shares originally subject to the Option at any time prior to the expiration date of the Option
or within 12 months after the date of such death or disability, whichever period is the shorter, by the person or persons entitled to do so under the Optionee’s will or, if the Optionee shall fail to make a testamentary disposition of an Option
or shall die intestate, the Optionee’s legal representative or representatives. 
  
 Section 9.2. Termination Other Than for Cause or Due to Death. In the event of an Optionee’s termination of employment other than by reason of death or permanent and total disability, the Optionee may
exercise such portion of his Option as was vested and exercisable by him at the date of such termination (the “Termination Date”) at any time within ninety days of the Termination Date. In any event, the Option cannot be exercised after
the expiration of the 
  

 7 

 term of the Option. Options not exercised within the applicable period specified above shall terminate. 
  
 (a) In the case of an Employee, a change of duties or position within the
Company or an assignment of employment in a Subsidiary Corporation or Parent Corporation of the Company, if any, or from such a Corporation to the Company, shall not be considered a termination of employment for purposes of the Plan. 
  
 (b) The Option Agreements may contain such provisions as the Board shall
approve with reference to the effect of approved leaves of absence upon termination of employment. 
  
 Section 9.3. Termination for Cause. In the event of an Optionee’s termination of employment, which termination is by the Company or a
Subsidiary Corporation for cause, any Option or Options held by him under the Plan, to the extent not exercised before such termination, shall terminate upon notice of termination for cause. 
  
 ARTICLE X 
 RIGHTS OF OPTIONEES 
  
 Section 10.1. Service. Nothing in the Plan shall interfere with or limit in anyway the right of the Company or a Subsidiary Corporation to terminate any Employee’s employment at any time, nor confer upon
any Employee any right to continue in the employ of the Company or a Subsidiary Corporation. 
  
 Section 10.2. Non-transferability. All Options granted under the Plan shall be nontransferable by the Optionee, other than by will or the laws of descent and distribution, and shall be exercisable during the
Optionee’s lifetime only by the Optionee. 
  
 ARTICLE XI

 OPTIONEE-EMPLOYEE’S TRANSFER 
 OR LEAVE OF ABSENCE 
  
 For
purposes of the Plan: 
  
 (a) A transfer of an Optionee who is
an Employee from the Company to a Subsidiary Corporation or Parent Corporation, or from one such Corporation to another, or 
  
 (b) A leave of absence for such an Optionee (i) which is duly authorized in writing by the Company or a Subsidiary Corporation, and (ii) if the Optionee
holds an Incentive Stock Option, which qualifies under the applicable regulations under the Code which apply in the case of incentive stock options, shall not be deemed a termination of employment. However, under no circumstances may an Optionee
exercise an Option during any leave of absence, unless authorized by the Board. 
  

 8 

 ARTICLE XII 
 AMENDMENT, MODIFICATION, AND 
 TERMINATION OF THE PLAN 
  
 (a) The Board may at any time terminate and from time to time may amend or
modify the Plan, provided, however, that no such action of the Board, without approval of the shareholders, may: 
  
 (i) increase the total amount of Stock which may be purchased through Options granted under the Plan, except as provided in Article V; 
  
 (ii) change the class of Employees eligible to receive Options; 

 
 (iii) change the provisions of the Plan to permit the repricing of any
outstanding Option after the grant thereof to provide for a lower Option exercise price without shareholder approval; or 
  
 (iv) otherwise amend or modify the Plan where approval of the shareholders is required by any law or regulation governing the Company. 
  
 (b) No amendment, modification, or termination of the Plan shall in any
manner adversely affect any outstanding Option under the Plan without the consent of the Optionee holding the Option. 
  
 ARTICLE XIII 
 ACQUISITION, MERGER OR
LIQUIDATION 
  
 Section 13.1. Acquisition. 

 
 (a) In the event that an acquisition occurs with respect to the Company,
the Company shall have the option, but not the obligation, to cancel Options outstanding as of the effective date of such acquisition, whether or not such Options are then exercisable, in return for payment to the Optionees of an amount equal to a
reasonable estimate of an amount (hereinafter the “Spread”), determined by the Board, equal to the difference between the net amount per share payable in the acquisition or as a result of the acquisition, less the exercise price of the
Option. In estimating the Spread, appropriate adjustments to give effect to the existence of the Options shall be made, such as deeming the Options to have been exercised, with the Company receiving the exercise price payable thereunder, and
treating the shares receivable upon exercise of the Options as being outstanding in determining the net amount per share. 
  
 (b) For purposes of this section, an “acquisition” shall mean any transaction in which substantially all of the Company’s assets are
acquired or in which a controlling amount of the Company’s outstanding shares are acquired, in each case by a single person or entity or an affiliated group of persons and entities. For purposes of this section, a controlling amount shall mean
more than 50% of the issued and outstanding shares of Stock of 
  

 9 

 the Company. The Company shall have the above option to cancel Options regardless of how the acquisition is effectuated,
whether by direct purchase, through a merger or similar corporate transaction, or otherwise. In cases where the acquisition consists of the acquisition of assets of the Company, the net amount per share shall be calculated on the basis of the net
amount receivable with respect to shares upon a distribution and liquidation by the Company after giving effect to expenses and charges, including but not limited to taxes, payable by the Company before the liquidation can be completed. 

 
 (c) Where the Company does not exercise its option under this Section
13.1 the remaining provisions of this Article XIII shall apply, to the extent applicable. 
  
 Section 13.2. Merger or Consolidation. If the Company shall be the surviving corporation in any merger or consolidation, any Option granted hereunder shall pertain to and apply to the securities to which a
holder of the number of shares of Stock subject to the Option would have been entitled in such merger or consolidation, provided that the Company shall not be considered the surviving corporation for purposes hereof if the Company is the survivor of
a reverse triangular merger. 
  
 Section 13.3. Other
Transactions. A dissolution or a liquidation of the Company or a merger and consolidation in which the Company is not the surviving corporation (the Company shall not be considered the surviving corporation for purposes hereof if the Company is
the survivor of a reverse triangular merger) shall cause every Option outstanding hereunder to terminate as of the effective date of such dissolution, liquidation, merger or consolidation. However, the Optionee either (i) shall be offered a firm
commitment whereby the resulting or surviving corporation in a merger or consolidation will tender to the Optionee an option (the “Substitute Option”) to purchase its shares on terms and conditions both as to number of shares and
otherwise, which will substantially preserve to the Optionee the rights and benefits of the Option outstanding hereunder granted by the Company, or (ii) shall have the right immediately prior to such dissolution, liquidation, merger, or
consolidation to exercise any unexercised Options whether or not then vested, subject to the provisions of the Plan. The Board shall have absolute and uncontrolled discretion to determine whether the Optionee has been offered a firm commitment and
whether the tendered Substitute Option will substantially preserve to the Optionee the rights and benefits of the Option outstanding hereunder. In any event, any Substitute Option for an Incentive Stock Option shall comply with the requirements of
Code Section 424(a). 
  
 ARTICLE XIV 
 SECURITIES REGISTRATION 
  
 Section 14.1. Securities Registration. In the event that the Company shall deem it necessary or desirable to register under the Securities Act of
1933, as amended, or any other applicable statute, any Options or any Stock with respect to which an Option may be or shall have been granted or exercised, or to qualify any such Options or Stock under the Securities Act of 1933, as amended, or any
other statute, then the Optionee shall cooperate with the Company and take such action as is necessary to permit registration or qualification of such Options or Stock. 
  

 10 

 Section 14.2. Representations. Unless the Company has determined that the following representation
is unnecessary, each person exercising an Option under the Plan may be required by the Company, as a condition to the issuance of the shares pursuant to exercise of the Option, to make a representation in writing (i) that he is acquiring such shares
for his own account for investment and not with a view to, or for sale in connection with, the distribution of any part thereof within the meaning of the Securities Act of 1933, (ii) that before any transfer in connection with the resale of such
shares, he will obtain the written opinion of counsel for the Company, or other counsel acceptable to the Company, that such shares may be transferred without registration thereof. The Company may also require that the certificates representing such
shares contain legends reflecting the foregoing. To the extent permitted by law, including the Securities Act of 1933, nothing herein shall restrict the right of a person exercising an Option to sell the shares received in an open market
transaction. 
  
 ARTICLE XV 
 TAX WITHHOLDING 
  
 Whenever shares of Stock are to be issued in satisfaction of Options exercised under the Plan, the Company shall have the power to require the recipient
of the Stock to remit to the Company an amount sufficient to satisfy federal, state, and local withholding tax requirements, if any. 
  
 ARTICLE XVI 
 INDEMNIFICATION

  
 To the extent permitted by law, each person who is or
shall have been a member of the Board or the Committee shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him in connection with or
resulting from any claim, action, suit, or proceeding to which he may be a party or in which he may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him in settlement
thereof, with the Company’s approval, or paid by him in satisfaction of judgment in any such action, suit, or proceeding against him, provided he shall give the Company an opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s certificate of incorporation or
bylaws, as a matter of law, or otherwise, or any power that the Company or any Subsidiary Corporation may have to indemnify them or hold them harmless. 
  
 ARTICLE XVII 
 REQUIREMENTS OF LAW

  
 Section 17.1. Requirements of Law. The granting of
Options and the issuance of shares of Stock upon the exercise of an Option shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

  

 11 

 Section 17.2. Governing Law. The Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the State of Texas. 
  
 ARTICLE XVIII 
 EFFECTIVE DATE OF PLAN 
  
 The Plan shall be effective on August     , 2003. 
  
 ARTICLE XIX 
 COMPLIANCE WITH CODE 
  
 Incentive Stock Options granted hereunder are intended to qualify as “incentive stock options” under Code Section 422. If any provision of the Plan is susceptible to more than one interpretation, such
interpretation shall be given thereto as is consistent with Incentive Stock Options granted under the Plan being treated as incentive stock options under the Code. 
  
 ARTICLE XX 
 NO OBLIGATION TO EXERCISE OPTION 
  
 The granting
of an Option shall impose no obligation upon the holder thereof to exercise such Option. 
  
 ARTICLE XXI 
 SHAREHOLDER APPROVAL 
  
 The Plan was approved by a vote of the majority of the shares of common stock of the Company on August 20, 2003. 

 
 THIS INCENTIVE STOCK OPTION PLAN was adopted by the Board of Directors of
Varitek Industries, Inc. on August     , 2003, to be effective upon adoption. 
  

 12

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