Document:

exv4w1

Exhibit 4.1

THIS NOTE AND THE SECURITIES UNDERLYING THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, TRANSFERRED OR
ASSIGNED UNLESS COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, A TRANSFER MEETING
THE REQUIREMENTS OF RULE 144 OF THE SECURITIES AND EXCHANGE COMMISSION, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

RNCS, INC.

FORM OF SECURED CONVERTIBLE PROMISSORY NOTE

			
	Up to
$[l]1
	 	[City, State]
	 
	 	September [ ], 2011

     For Value Received, RNCS, Inc., a Delaware corporation (the “Company”),
hereby unconditionally promises to pay to the order of [l] (together with its successors and
assigns, “Holder”), in lawful money of the United States of America and in immediately
available funds, the principal sum of up to [l] ($[l]), or such lesser amount as the Company may
owe Holder hereunder, as determined in accordance with Section 1.2 (such amount, the
“Principal”), together with accrued and unpaid interest thereon, each due and payable on
the date and in the manner set forth below.

     This Secured Convertible Promissory Note (this “Note”) is one of a series of Secured
Convertible Notes (collectively, the “Notes”) executed and delivered in connection with
that certain Securities Purchase Agreement by and among the Company and the purchasers listed on
Annex I thereto (the “Investors”), dated as of September [l], 2011 (the
“Securities Purchase Agreement”). Subject to the terms and conditions of the Notes, funds
will be provided to the Company under the Notes in up to three funding tranches of Five Hundred
Thousand Dollars ($500,000) each, with the first tranche to be funded concurrently with the
execution and delivery of the Notes (the “First Tranche”). The purchasers of the Notes
under the Securities Purchase Agreement other than the Holder are referred to below as the
“Other Holders” and the Other Holders and the Holder are collectively referred to herein as
the “Holders.” All capitalized terms used herein and not otherwise defined herein will
have the respective meanings given to them in the Securities Purchase Agreement.

     1. Principal Repayment; Security.

          1.1 Repayment of this Note will be made in lawful money of the United States of America to
Holder at [address], or at such other place as Holder may designate in writing. Unless earlier
converted pursuant to Section 4 hereof, the Principal and accrued and unpaid
interest will be due and payable in cash on the earlier to occur of (the “Maturity
Date”): (i) 150 days from the date set forth above, or (ii) an Event of Default (as defined
below). This Note is secured by certain collateral of the Company and RXi (defined below) and
subject to a guaranty, as described in that certain: (a) Security Agreement, dated September [l],
2011, by and between the Company and Tang Capital Partners, LP as agent (the “Agent”); (b)
Pledge, Assignment and

 

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Maximum principal amount to equal $1.5 million, multiplied by the
fraction of the total investment   to be   put in by each investor
(e.g., if Tang  represents 50% of the  total investment, then
$750,000).

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Security Agreement, dated September [l], 2011, by and between RXi
Pharmaceuticals Corporation, a Delaware corporation (“RXi”); and the Agent, and (c) General
Continuing Guaranty, dated September [l], 2011, by and between RXi and the Agent.

          1.2 The Principal due under Section 1.1 shall be equal to: (x) [l] ($[l]), which sum
the Holder has lent to the Company concurrent with the execution of this Note (the “First
Tranche Loan Amount”), plus (y) the Second Tranche Loan Amount and the Third Tranche Loan
Amount (each defined below), to the extent such sums are lent to the Company in accordance with
Section 1.3 of this Note.

          1.3 Use of Proceeds; Additional Tranches.

               1.3.1 The funds provided by the Holders in the First Tranche will be used to fund the
Company’s operations pursuant to the budget attached hereto as Annex A (the “Initial
Budget”). Subject to the approval of the Second Tranche Budget and the Third Tranche Budget
(each defined below), the Holders will provide up to two additional funding tranches of Five
Hundred Thousand Dollars ($500,000) each, as set forth below.

               1.3.2 Within fifteen (15) days prior to the exhaustion of the funds underlying the First
Tranche, the Company will present the Holders with an updated budget for their review and approval,
in their sole discretion (the “Second Tranche Budget”), which budget will detail the
planned use of proceeds for a second tranche of funding under the Notes in the aggregate sum of sum
of Five Hundred Thousand Dollars ($500,000) (the “Second Tranche”). Upon the Company and
the Requisite Holders (defined below) mutually agreeing upon the use of proceeds under the Second
Tranche Budget, the Holders will fund the Second Tranche, with the Holder under this Note thereupon
being required to lend the Company an additional [l] ($[l]) of Principal hereunder (the “Second
Tranche Loan Amount”). Upon the funding of the Second Tranche Loan Amount, interest will
thereafter accrue on such additional Principal balance, as set forth below in Section 2.

               1.3.3 Within fifteen (15) days prior to the exhaustion of the funds underlying the Second
Tranche, the Company will present the Investors with an updated budget for their review and
approval, in their sole discretion (the “Third Tranche Budget”), which budget will detail
the planned use of proceeds for a third tranche of funding under the Notes in an amount equal to in
the aggregate sum of sum of Five Hundred Thousand Dollars ($500,000) (the “Third Tranche”).
Upon the Company and the Requisite Holders (defined below) mutually agreeing on the use of
proceeds under the Third Tranche Budget, the Holders will fund the Third Tranche, with the Holder
under this Note thereupon being required to lend the Company an additional [l] ($[l]) of Principal
hereunder (the “Third Tranche Loan Amount”). Upon the funding of the Third Tranche Loan
Amount, interest will thereafter accrue on such additional Principal balance, as set forth below in
Section 2. For purposes of this Note, each of the Initial
Budget, the Second Tranche Budget and the Third Tranche Budget are referred to below as a
“Budget.”

          2. Interest Rate. The Company further promises to pay interest on the outstanding
Principal from the date hereof until payment in full, with interest accruing from the Funding Date
(defined below) with respect to each tranche at a rate of seven percent (7.0%) per annum or the

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maximum rate permitted by law, whichever is less. Interest will be due and payable on the Maturity
Date and will be calculated on the basis of a 360-day year for the actual number of days elapsed.
Notwithstanding the foregoing, upon the occurrence of an Event of Default, interest shall
thereafter accrue at a rate of eighteen percent (18%) per annum, or the maximum rate permitted by
law, whichever is less. For purposes of this Section 2, the “Funding Date” shall
mean the respective dates on which the Company receives the First Tranche Loan Amount, the Second
Tranche Loan Amount and the Third Tranche Loan Amount.

     3. Prepayment. The Company may not in whole or in part prepay its obligations under
this Note without the prior written consent of Holder.

     4. Conversion

     4.1 Series A Preferred Conversion. At the Closing, the Principal and accrued interest
due under the Note will automatically convert into fully paid shares (the “Conversion
Shares”) of Series A Preferred at rate of $1,000 per share. To the extent necessary, the
Company may issue fractional shares of Series A Preferred in issuing the Conversion Shares pursuant
to this Section 4.1.

          4.2 Common Stock Conversion. If, as of the Maturity Date, (i) neither the Company nor
the Investors have terminated the Securities Purchase Agreement pursuant to Sections 8.01(d) or
8.01(e), respectively, and (ii) the Closing has not occurred, then, in such case, this Note will be
automatically cancelled as to 50% of the outstanding balance (i.e., Principal and accrued interest)
thereof in exchange for the Company’s sale and issuance to the Investors at such time of a number
of shares of Company common stock, par value $0.0001 per share, (the “Common Stock”)
constituting 51% of the outstanding shares of Common Stock (measured on a Fully-Diluted Basis)
immediately following such issuance, after giving effect to the issuance contemplated by the
Advirna Amendment. The remaining balance due under this Note will be due and payable at the
Maturity Date as set forth herein. For purposes of this Note, “Fully-Diluted Basis”
includes the issued and outstanding capital stock of the Company, determined on an as-converted
basis, as well as any securities underlying outstanding options, warrants, convertible securities
or future stock issuance obligations, conditional, unconditional or otherwise. In the events
described in clauses (i) and (ii), above, it is intended and agreed that the shares of Company
common stock held by RXi shall constitute 44% of the outstanding shares of Common Stock (measured
on a Fully-Diluted Basis) and that the Company, RXi and the holders shall enter into a customary
form of stockholders agreement under which RXi shall be entitled to designate one or more members
of the Board of Directors of the Company constituting a minority of the members of the Board of
Directors, to receive periodic financial and other information from the Company, tag-along (and
drag-along) rights in connection with proposed sales or other dispositions of capital stock of the
Company, and other protective rights as a
minority stockholder of the Company, all as shall be mutually agreed upon among the Company,
RXi and the holders.

          4.3 Delivery of Stock Certificates, Etc.

               4.3.1 Conversion Pursuant to Section 4.1. If this Note is converted pursuant to
Section 4.1, written notice will be delivered to Holder at the address last shown on

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the
records of the Company for Holder or given by Holder to the Company for the purpose of notice,
notifying Holder of the conversion to be effected, the principal amount of this Note to be
converted, together with all accrued and unpaid interest, the date on which such conversion is
expected to occur and calling upon Holder to surrender to the Company, in the manner and at the
place designated, this Note. Upon such conversion of this Note, Holder agrees to deliver the
original of this Note (or a notice to the effect that the original Note has been lost, stolen or
destroyed and an agreement acceptable to the Company whereby the Holder agrees to indemnify the
Company from any loss incurred by it in connection with this Note) at the Closing for cancellation;
provided, however, that at such time, this Note will be deemed converted and of no
further force and effect, whether or not it is delivered for cancellation as set forth in this
sentence. The Company will, as soon as practicable thereafter, issue and deliver to Holder a
certificate or certificates for the number of shares to which Holder will be entitled upon such
conversion.

               4.3.2 Conversion Pursuant to Section 4.2. If this Note is converted pursuant to
Section 4.2, written notice will be delivered to Holder at the address last shown on the
records of the Company for Holder or given by Holder to the Company for the purpose of notice,
notifying Holder of the conversion to be effected, the amount of this Note to be converted (taking
into account all accrued and unpaid interest), the date on which such conversion is expected to
occur and the remaining balance due under the Note. The written notice shall also call upon Holder
to surrender to the Company, in the manner and at the place designated, this Note and the remaining
balance due under this Note. Upon such conversion of this Note and payment of remaining balance
due, Holder agrees to deliver the original of this Note (or a notice to the effect that the
original Note has been lost, stolen or destroyed and an agreement acceptable to the Company whereby
the Holder agrees to indemnify the Company from any loss incurred by it in connection with this
Note) on the Maturity Date for cancellation; provided, however, that at such time,
as long as the remaining balance due under this Note is paid in full, this Note will be deemed
converted as set forth in Section 4.2 and paid in full and of no further force and effect,
whether or not it is delivered for cancellation as set forth in this sentence. The Company will,
as soon as practicable thereafter, issue and deliver to Holder a certificate or certificates for
the number of shares to which Holder will be entitled upon such conversion.

               4.3.3 Any conversion of this Note pursuant to Section 4 will be deemed to have been
made immediately prior to the Closing or the Maturity Date, as applicable, and on and after such
date the persons entitled to receive the shares issuable upon such conversion will be treated for
all purposes as the record Holder of such shares.

     5. Default. If any of the following events (hereafter called “Events of
Default”) occur:

          (a) The Company makes a general assignment for the benefit of creditors;

          (b) The Company files a voluntary petition in bankruptcy, or becomes insolvent or adjudicated
bankrupt, or files any petition or answer seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under the present or any future federal
bankruptcy act or other applicable federal, state or other statute, law or regulation, or files any
answer admitting the material allegation of a petition filed against the

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Company in such
proceeding, or seeks or consents to or acquiesce in the appointment of any trustee, receiver or
liquidator of the Company of all or any substantial part of the properties of the Company, or the
Company commences the winding up or the dissolution or liquidation of the Company;

          (c) Within sixty (60) days after a court of competent jurisdiction has entered an order,
judgment or decree approving any complaint or petition against the Company seeking reorganization,
dissolution or similar relief under the present or any future federal bankruptcy act or other
applicable federal, state or other statute, law or regulation, such order, judgment or decree has
not been dismissed or stayed pending appeal, or, within sixty (60) days after the appointment,
without the consent or acquiescence of the Company, of any trustee, receiver or liquidator of the
Company or of all or any substantial part of the properties of the Company, such appointment has
not been vacated or stayed pending appeal, or if, within sixty (60) days after the expiration of
any such stay, has not been vacated;

          (d) The Company or RXi materially breach any representation, warranty or covenant contained in
the Transaction Documents and such breach is not cured (if it can be cured) within five (5)
Business Days after the Investors provide notice of such breach;

          (e) The Company’s actual aggregate expenditures with respect to any Budget exceed 105% of the
aggregate budgeted amount for that time period covered by such Budget, without the prior approval
of the Investors;

          (f) There is a Material Adverse Effect with respect to the Company, the Company or RXi provide
written notice to the Investors that either of them will be unable to satisfy a condition to
Closing set forth in Article V of the Securities Purchase Agreement, or the Securities
Purchase Agreement is terminated by the Investors as permitted under Section 8.01(e)
thereof;

          (g) A final judgment or order for the payment of monetary damages or awarding injunctive
relief in connection with the transactions contemplated by the Securities Purchase Agreement is
rendered against the Company and the same remains undischarged for a period of thirty (30) days
during which execution has not been effectively stayed, or any injunction, judgment, writ,
assessment, warrant of attachment, or execution or similar process has been issued or levied
against a substantial part of the property of the Company, if any and such injunction, judgment,
writ, or similar process is not released, stayed, vacated or otherwise dismissed within thirty (30)
days after issue or levy;

     then, and in each and every such case, amounts under this Note will be forthwith due and
payable, without presentation, protest or further demand or notice of any kind, all of which are
hereby expressly waived. The Company will give prompt written notice to Holder of the
occurrence of any and all of the foregoing events. In addition to the foregoing remedies, upon the
occurrence and during the continuance of any Event of Default, Holder may exercise any other right
power or remedy granted to it by the Transaction Documents or otherwise permitted to it by law,
either by suit in equity or by action at law, or both.

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     For the purposes of this Note, a “Business Day” means a day other than a Saturday or a Sunday
on which banks are open for business in New York.

     6. Payment. Unless converted into the Company’s equity securities pursuant to the
terms hereof, payment will be made in lawful tender of the United States.

     7. Waiver. The Company waives presentment and demand for payment, notice of
dishonor, protest and notice of protest of this Note, and will pay all costs of collection when
incurred, including, without limitation, reasonable attorneys’ fees, costs and other expenses. The
right to plead any and all statutes of limitations as a defense to any demands hereunder is hereby
waived to the fullest extent permitted by law.

     8. Assignment. The rights, interests or obligations hereunder may not be assigned, by
operation of law or otherwise, in whole or in part, by the Company without the prior written
consent of Holder.

     9. Registration, Transfer and Replacement of the Note. This Note will be a registered
Note. The Company will keep, at its principal executive office, books for the registration and
registration of transfer of this Note. Prior to presentation of any Note for registration of
transfer, the Company will treat the person in whose name such Note is registered as the owner and
Holder of such Note for all purposes whatsoever, whether or not such Note will be overdue, and the
Company will not be affected by notice to the contrary. Subject to any restrictions on or
conditions to transfer set forth herein, the Holder, at its option, may in person or by duly
authorized attorney surrender the same for exchange at the Company’s chief executive office, and
promptly thereafter and at the Company’s expense, except as provided below, receive in exchange
therefor one new Note, in the principal requested by such holder, dated the date to which interest
will have been paid on the Note so surrendered or, if no interest will have yet been so paid, dated
the date of the Note so surrendered and registered in the name of such person or persons as will
have been designated in writing by such Holder or its attorney for the same principal amount as
then unpaid principal amount of the Note so surrendered. Upon receipt by the Company of evidence
reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of
any Note and (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to
it; or (b) in the case of mutilation, upon surrender thereof, the Company, at its expense, will
execute and deliver in lieu thereof a new Note executed in the same manner as the Note being
replaced, in the same principal amount as the unpaid principal amount of such Note and dated the
date to which interest will have been paid on such Note or, if no interest will have yet been so
paid, dated the date of such Note.

     10. Governing Law; Consent to Jurisdiction. This Note and all actions arising out of
or in connection with this Note will be governed by and construed in accordance with the laws of
the State of California, without regard to the conflicts of law provisions of the State of
California
or of any other state. Each of the Company and the Holder (i) hereby irrevocably submits to
the exclusive jurisdiction of the United States District Court sitting in California and the courts
of the State of California for the purposes of any suit, action or proceeding arising out of or
relating to this Note and (ii) hereby waives, and agrees not to assert in any such suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the
suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit,
action

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or proceeding is improper. Each of the Company and the Holder consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under the Securities Purchase Agreement and agrees that such
service shall constitute good and sufficient service of process and notice thereof. Nothing in this
Section 10 shall affect or limit any right to serve process in any other manner permitted
by law. Each of the Company and the Holder hereby agree that the prevailing party in any suit,
action or proceeding arising out of or relating to this Note shall be entitled to reimbursement for
fees and expenses, including reasonable legal fees, from the non-prevailing party.

     11. Notices. All notices and other communications required or permitted hereunder
will be in writing and will be transmitted by e-mail or facsimile, or, if sent within the United
States, mailed by first-class mail, postage prepaid, to the address set forth below the recipient’s
signature, or at such other address as the recipient will have furnished to the other party in
writing. All notices will be deemed effectively delivered upon transmission or mailing.

     12. Amendment. No provision of the Notes may be modified or amended on behalf of all
of the Holders other than by a written instrument signed by the Company and the holders of at least
a majority of the combined principal amount of the then outstanding Notes (the “Requisite
Holders”); provided that if any of the rights of the Holder under this Note are materially
diminished by such waiver or amendment in a manner that is not similar in all material respects to
the effects on the Other Holders, then such waiver or amendment shall not be effective with respect
to the Holder without the written consent of the Holder. The Holder acknowledges that any
amendment or modification made in compliance with this Section 12 shall be binding on all
Holders of the Notes, including, without limitation, an amendment or modification that has an
adverse effect on any or all Holders. Notwithstanding the foregoing, nothing provided in this
Section 12 shall limit the Holder’s right to waive or amend any provision of this Note on
its own behalf. No consideration shall be offered or paid to any Holder of Notes to amend or waive
or modify any provision of the Notes unless the same consideration is also offered to all of the
Holders holding Notes on the date of such amendment, waiver or modification, on a pro rata basis
based upon the outstanding Principal amount of the Notes. This provision constitutes a separate
right granted to each Holder by the Company and shall not in any way be construed as the Holders
acting in concert or as a group.

     13. Ranking of Notes. The obligations of the Company under the Notes shall be senior
in time and right of payment to all other Indebtedness (defined below) of the Company. Upon
maturity or any Event of Default, the Holder will be entitled to receive, before any distribution
or payment is made upon, or set apart with respect to, any Indebtedness of the Company other than
Indebtedness represented by the Notes, or any class of capital stock of the Company, an amount
equal to the Principal amount plus all accrued and unpaid interest thereon. For purposes of this
Section 13, “Indebtedness” means (a) all obligations for borrowed money;
(b) all obligations evidenced by bonds, debentures, notes, or other similar instruments and
all reimbursement or other obligations in respect of letters of credit, bankers acceptances,
current swap agreements, interest rate hedging agreements, interest rate swaps, or other financial
products; (c) all capital lease obligations; (d) all obligations or liabilities secured by a lien
or encumbrance on any asset of the Company, irrespective of whether such obligation or liability is
assumed; (e) all obligations for the deferred purchase price of assets, together with trade debt
and

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other accounts payable; (f) all synthetic leases; (g) any obligation guaranteeing or intended
to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse) any of the foregoing obligations of any other person; (h) trade debt; and (i)
endorsements for collection or deposit.

     14. Usury. In the event any interest is paid on this Note which is deemed to be in
excess of the then legal maximum rate, then that portion of the interest payment representing an
amount in excess of the then legal maximum rate will be deemed a payment of principal and applied
against the principal of this Note.

[Signature page follows]

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     IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first set forth
above.

	 	 	 	 	 
	 	RNCS, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	Agreed and Accepted:

[l]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[Signature page follows]exv10w1

EXECUTION VERSION

CONTRIBUTION AGREEMENT

     THIS CONTRIBUTION AGREEMENT (this “Agreement”) is made and entered into as of
September 23, 2011 (the “Effective Date”), by and between RXi Pharmaceuticals Corporation,
a Delaware corporation (“RXi”) and RNCS, Inc., a Delaware corporation and wholly owned
subsidiary of RXi (“RNCS”).

RECITALS

     WHEREAS, RXi owns or has the right to use certain tangible and intangible assets and rights
that collectively constitute the RNAi Platform;

     WHEREAS, prior to the execution and delivery of this Agreement, RXi formed RNCS under the laws
of Delaware for purposes of effectuating the transactions contemplated by this Agreement;

     WHEREAS, the board of directors of RXi has determined it to be in the best interests of RXi
and its stockholders to transfer and contribute to RNCS the rights and assets constituting the RNAi
Platform, with the objective of distributing shares of RNCS Common Stock to the RXi stockholders,
as contemplated in the Purchase Agreement (defined below); and

     WHEREAS, it is contemplated that Tang Capital Partners, LP and RTW Investments, LLC (together,
the “Investors”) will purchase bridge notes and preferred shares of RNCS pursuant to that
certain Securities Purchase Agreement by and among the Investors, RXi and RNCS to be executed
contemporaneously with the execution of this Agreement (the “Purchase Agreement”), with the
capital to be invested by the Investors being used to fund the further development of the RNAi
Platform.

AGREEMENT

     NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties
and agreements herein contained, the parties agree as follows:

SECTION 1. DEFINITIONS; CONSTRUCTION

     1.1 Definitions. When used herein, the following capitalized terms shall have the
meanings set forth below. Capitalized terms that are not otherwise defined herein shall have the
meanings attributed to such terms in the Purchase Agreement.

          (a) “Ancillary Agreements” means the Bill of Sale and the Assignment and Assumption
Agreement.

          (b) “Annualized Net Sales” means the cumulative Net Sales over any rolling period of
four consecutive fiscal quarters (i.e., three-month periods ending on March 31, June 30, September
30 and December 31).

          
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          (c) “Covered Products” means any pharmaceutical product that has been approved for
marketing by the FDA, EMA or other foreign equivalent agency, provided that the manufacture, sale,
use, or importation of such product would be within the scope of one or more valid claims contained
in issued patents that are included in the Transferred Technology.

          (d) “Damages” means out-of-pocket losses, damages, assessments, fines, penalties,
fees, expenses, costs (including reasonable attorney’s fees) or amounts paid in settlement, but
shall not include punitive, consequential or special damages or lost profits. The calculation of
any Damages of any party shall reflect offsets for the amount of any insurance proceeds received or
receivable by the party in respect of such Damages.

          (e) “Indemnified Party” means a party seeking indemnification under Section 5.1 or 5.2
hereof.

          (f) “Indemnifying Party” means the party from which indemnification is sought under
Section 5.1 or 5.2 hereof.

          (g) “Indemnity Claim” means a claim for indemnity under Section 5.1or 5.2, as the case
may be.

          (h) “Net Sales” means any amount received by RNCS for the sale of any Covered
Products, plus amounts received by any Third Parties who hold from RNCS rights under the
Transferred Technology to make, have made, sell, offer or sale, use or import any Covered Products,
less the following: (a) customary trade and quantity discounts actually allowed and taken; (b)
allowances actually given for returned Covered Products; (c) freight and insurance, if separately
identified on the invoice; and (d) value added tax, sales, use, or turnover taxes, excise taxes,
and customs duties included in the invoiced price. In addition, Net Sales are subject to the
following: (i) in the case of pharmacy incentive programs, hospital performance incentive program
charge backs, disease management programs, co-pay rebate programs, and similar programs, or
discounts, including on “bundles” of products, all discounts and the like shall be deducted from
the gross amounts received in determining the Net Sales and, if such discounts relate to a bundle
of products, then the discounts shall be allocated among the bundled products on the basis on which
such discounts and the like were accrued, or if such basis cannot be determined, proportionately to
the list prices of such products; (ii) in the case of any sale or other disposal of a Covered
Product to an affiliated party for resale, the Net Sales shall be calculated as above on the value
charged or invoiced on the first arm’s length sale to a third party; and (iii) if a Covered Product
is sold to a customer in a particular country other than on normal commercial terms or as part of a
package of products and services, the Net Sales of that Covered Product shall be deemed to be “the
fair market value” of such Covered Product (i.e., the value that would have been derived had said
Covered Product been sold as a separate product to a similar customer in the country concerned on
normal commercial terms).

          (i) “Third Party” means any person other than RXi or RNCS and their respective
affiliates.

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          (j) “Transferred Contracts” means the Contractual Obligations listed on Schedule
1.1(j) hereto, as such schedule may be supplemented from time to time after the Closing by
mutual agreement between RXi and RNCS (any such Contractual Obligations so added being referred to
herein as “Additional Transferred Contracts”).

          (k) “Transferred Technology” means the assets, equipment, rights and property
(tangible and intangible) listed on Schedule 1.1(k) hereto and any remedies against any and
all past, present and future infringements thereof and rights to protections of interest therein.

     1.2 Construction.

          (a) Gender. Words used herein, regardless of the number and gender specifically used,
shall be deemed and construed to include any other number, singular or plural, and any other
genders as the context requires.

          (b) Paragraph Headings. The paragraph and other headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its interpretation.

SECTION 2. CONTRIBUTION OF TRANSFERRED ASSETS

     2.1 Contribution Transaction. In consideration for the obligations to make the
Milestone Payments, when and if the conditions to such payments are met, and in consideration for
RNCS’s assumption of the Assumed Obligations, RXi hereby transfers, assigns, conveys and
contributes to RNCS and its successors and assigns, for its and their own use and behalf, all of
RXi’s right, title and interest in and to the following assets, other than any such assets as may
be among the Excluded Assets (the “Transferred Assets”), and all goodwill associated
therewith, and RNCS hereby accepts the transfer, assignment, conveyance and contribution of the
Transferred Assets and agrees to fully and entirely stand in the place of RXi in all matters
related thereto (collectively, the “Contribution Transaction”):

          (a) the Transferred Contracts;

          (b) the Transferred Technology;

          (c) originals or, at RXi’s election, true and complete copies, of all (i) accounting and other
books and records; (ii) correspondence; (iii) reports; (iv) studies; and (v) documents and other
business records and files, in each case to the extent related to the Transferred Assets, the
Assumed Obligations or the conduct of the Business after the date hereof (collectively, the
“Business Documents”);

          (d) the tangible personal property and equipment, if any, listed on Schedule 2.1(d)
hereto; and

          (e) the additional rights and property listed on Schedule 2.1(e) hereto.

3

 

     2.2 Excluded Assets. Notwithstanding anything to the contrary contained in Section
2.1 or elsewhere in this Agreement, the following assets and rights of RXi (the “Excluded
Assets”) are excluded from the Transferred Assets:

          (a) the rights and property, if any, listed in Schedule 2.2(a) hereto;

          (b) all personnel and other records that RXi is required by law to retain in its possession,
provided that RXi shall make these records reasonably available to RNCS after the date hereof to
the extent related to RNCS’s conduct of the Business;

          (c) RXi’s rights under this Agreement;

          (d) all rights and obligations of RXi arising under or relating to any Contractual Obligations
not included in the Transferred Contracts; and

          (e) all rights in the nature of affirmative defenses, offsets or counterclaims under any of
the Transferred Contracts with respect to any claims against RXi or its successors and assigns with
respect to the Transferred Contracts.

     2.3 Assumption of Obligations.

          (a) RNCS hereby assumes from RXi, and agrees to fully and faithfully perform and discharge
when due, and be solely responsible for, the following (the “Assumed Obligations”):

               (i) the accounts payable and inter-company payable set forth on Schedule 2.3(a) hereto;

               (ii) all of RXi’s payment, performance and other obligations arising on or after the
Contribution Closing Date under the Transferred Contracts; and

               (iii) all other liabilities incurred on or after the Contribution Closing Date relating to the
Transferred Assets.

          (b) Except as provided in Section 2.3(a), RNCS shall not assume or be responsible to perform,
pay or discharge, and shall have no liability for, and RXi shall remain liable for any obligations,
liabilities and commitments of RXi, of any kind or nature, known or unknown, fixed or contingent,
including, without limitation (i) all liabilities arising under or relating to the Transferred
Assets, to the extent that such liabilities arose or accrued prior to the Contribution Closing
Date, and (ii) all liabilities arising under or relating to the Excluded Assets, whether arising
before or after the Contribution Closing Date (the “Excluded Liabilities”).

          (c) The assumption by RNCS of the Assumed Obligations under Section 2.3(a) shall not enlarge
or otherwise affect any rights of third parties under any of the Transferred Contracts.

4

 

     2.4 Inability to Transfer Assets.

          (a) If and to the extent that the purported transfer to RNCS hereunder of any of the
Transferred Assets would violate applicable laws or agreements or require any consent or
governmental approval in connection with the transactions contemplated hereby that has not been
obtained by the date hereof (a “Transfer Impediment”), then, unless the parties shall
otherwise determine, the actual transfer to RNCS of such Transferred Asset shall be automatically
deemed deferred, such purported transfer shall be null and void until such time as all relevant
Transfer Impediments are removed or obtained, as applicable, and RXi shall not be obligated to
transfer such asset except as provided in Section 2.4(b) below. Notwithstanding the foregoing, such
asset shall be considered a Transferred Asset for purposes of determining the Assumed Obligations.

          (b) If the transfer or assignment of any asset intended to be transferred hereunder is not
consummated on the date hereof, whether as a result of the provisions of Section 2.1(a) or for any
other reason, then RXi shall hold such asset for the use and benefit, insofar as reasonably
possible and not in violation of a Transfer Impediment, of RNCS (at the expense of RNCS) and shall
take such other actions as may be reasonably requested by RNCS in order to place RNCS, insofar as
reasonably possible and not in violation of a Transfer Impediment, in the same position as if such
asset had been transferred as contemplated hereby and so that all the benefits and burdens relating
to such asset, including possession, use, risk of loss, potential for gain, and dominion, control
and command over such asset, are to inure from and after the date hereof to RNCS. If and when a
Transfer Impediment that caused the deferral of a transfer of any asset pursuant to Section 2.1(a)
is removed or obtained, as applicable, the transfer of the applicable asset shall be effected in
accordance with the terms of this Agreement. The parties shall cooperate and use reasonable
efforts, without the requirement to make any payment or make a material concession, to remove or
obtain, as applicable, any Transfer Impediment that prohibits the transfer of any of the
Transferred Assets hereunder.

     2.5 Inability to Assign Liabilities. If the assignment of an Assumed Obligation to
RNCS hereunder is prohibited by a Transfer Impediment, RXi shall continue to be bound by the
relevant obligations and, unless not permitted by law or the terms of the relevant obligation, RNCS
shall, as agent or subcontractor for RXi, pay, perform and discharge fully, or cause to be paid,
transferred or discharged all the obligations of RXi thereunder without recourse or obligation to
RXi. RXi shall, without further consideration, pay and remit, or cause to be paid or remitted, to
RNCS promptly all money, rights and other consideration received by it in respect of such
performance (unless any such consideration is an Excluded Asset). If and when such Transfer
Impediment is removed or obtained, as applicable, or such obligations shall otherwise become
assignable, the transfer of the applicable obligation shall be effected in accordance with the
terms of this Agreement. The parties shall cooperate and use reasonable efforts, without the
requirement to make any payment or make a material concession, to remove or obtain, as applicable,
any Transfer Impediment that prohibits the assignment of any of the Assumed Obligations hereunder.

5

 

     2.6 Closing. The consummation of the Contribution Transaction (the “Contribution
Closing”) shall take place concurrently with the execution of this Agreement. The date that
the Contribution Closing actually occurs is referred to herein as the “Contribution Closing
Date.”

     2.7 Closing Deliverables.

          (a) At the Contribution Closing, RXi shall deliver or cause to be delivered to RNCS all of the
Transferred Assets, and in furtherance thereof:

               (i) concurrently with the execution of this Agreement, RXi shall deliver or cause to be
delivered to RNCS all of the Transferred Contracts with such assignments thereof and consents to
assignments as necessary to transfer to RNCS RXi’s full right, title and interest in the same;

               (ii) concurrently with the execution of this Agreement, RXi shall execute and deliver to RNCS
a bill of sale in substantially the form attached hereto as Exhibit A (the “Bill of
Sale”) and an Assignment and Assumption Agreement in substantially the form attached hereto as
Exhibit B (the “Assignment and Assumption Agreement”); and

               (iii) as soon as is practicable, but in any within 30 days after the execution of this
Agreement, RXi shall make available, transfer and deliver to RNCS any and all physical embodiments
of the Transferred Technology.

          (b) RNCS shall accept delivery of the Transferred Assets and execute and deliver to RXi the
Assignment and Assumption Agreement.

     2.8 Milestone Payments. As partial consideration for the Transferred Assets, RNCS
shall be required to pay to RXi up to two milestone payments based on Annualized Net Sales of all
Covered Products (the “Milestone Payments”). Each of the two Milestone Payments will be
due when and if RNCS achieves Annualized Net Sales equal to or greater than the thresholds set
forth below, at which time, RNCS shall, within 120 days from the quarter end in which the threshold
was met, pay RXi the amounts set forth below by wire transfer.

	 	 	 	 	 	 	 	 
	 	Annualized Net Sales	 	 	Milestone Payment	 
	 	$	500,000,000	 	 	$	15,000,000	 
	 	$	1,000,000,000	 	 	$	30,000,000	 

SECTION 3. REPRESENTATIONS AND WARRANTIES.

     Subject to such exceptions as are specifically disclosed in the schedules referenced in this
Section 3, of even date herewith, delivered by RXi to RNCS and the Investors (the “RXi
Disclosure Schedules”), RXi represents and warrants as follows:

     3.1 Organization. RXi is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and has the requisite corporate power to

6

 

own, lease and operate its properties and assets and to conduct its business as it is now
being conducted.

     3.2 Authorization. RXi has the requisite corporate power and authority to enter into
and perform this Agreement and the Ancillary Agreements (collectively, the “Transaction
Documents”) and to perform its obligations hereunder and thereunder. The execution and
delivery of the Transaction Documents and consummation of the Contribution Transaction by RXi have
been duly and validly authorized by all necessary corporate action and no further consent or
authorization of RXi or its board of directors or stockholders is required to consummate the
Contemplated Transactions. When executed and delivered by RXi, each of the Transaction Documents
shall constitute a valid and binding obligation of RXi, enforceable against it in accordance with
its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization,
moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting
generally the enforcement of, creditor’s rights and remedies or by other equitable principles of
general application.

     3.3 No Approvals or Conflicts. Neither the execution and delivery by RXi of this
Agreement nor the consummation by RXi of the transactions contemplated hereby will (i) violate,
conflict with or result in a breach of any provision of the Certificate of Incorporation or Bylaws
of RXi, each as amended to date; (ii) except as set for in Schedule 3.3 hereto, violate,
conflict with or result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under, or result in the
creation of any Encumbrance upon any of the Transferred Assets under any Contract, or other
instrument to which RXi or any of its properties may be bound; (iii) violate any order, injunction,
judgment, ruling, law or regulation of any court or governmental authority applicable to RXi or
give rise to any Transfer Impediments; or (iv) except for applicable requirements of The NASDAQ
Capital Market and except for applicable requirements of the Securities Act, the Exchange Act and
the rules and regulations promulgated thereunder, require any consent, approval or authorization
of, or notice to, or declaration, filing or registration with, any governmental or regulatory
authority or other third party, which, in the case of clauses (ii), (iii) and (iv) above, would be
reasonably likely to have a Material Adverse Effect or a material, adverse affect on RXi’s ability
to consummate the transactions contemplated hereby and thereby.

     3.4 Litigation. As of the date hereof, there are no claims, actions, proceedings or
investigations pending or, to the knowledge of RXi, threatened against RXi or the transactions
contemplated by this Agreement, before any court or governmental or regulatory authority or body
which would be reasonably likely to have a Material Adverse Effect or a material, adverse effect on
RXi’s ability to consummate the transactions contemplated hereby.

     3.5 Patents, Trademarks, Trade Names, Etc. Schedule 3.5 hereto contains an
accurate summary of all Intellectual Property Rights owned or used by RXi that are material to the
Transferred Assets or the Business, all applications therefor and a list of all Contractual
Obligations relating thereto (collectively, “RXi Intellectual Property”). The consummation
of the transactions contemplated by this Agreement, including the transfer and assignment of the
RXi Intellectual Property to RNCS, will not materially impair the right or ability of RNCS to use
the RXi Intellectual Property; (ii) no claims have been asserted by any person to the use of any

7

 

such RXi Intellectual Property, or challenging or questioning the validity or effectiveness of
any such license or agreement, which claims, if adversely decided, would be reasonably likely to
have a Material Adverse Effect; and (iii) to the knowledge of RXi, the use of such RXi Intellectual
Property by RXi does not, and its use by RNCS following the date hereof will not, infringe on the
rights of any person. RXi’s rights in and to such RXi Intellectual Property are sufficient to
permit RNCS to carry on the Business following the date hereof in all material respects as
previously conducted by RXi.

     3.6 Contracts. Each of the Transferred Contracts is in full force and effect, and
there are no existing defaults by RXi or, to the knowledge of RXi, any other party thereunder that
would be reasonably likely to result in a Material Adverse Effect. Except as set for in
Schedule 2.3(a) hereto, there are no royalties, maintenance fees, milestone
payments, license fees or other amounts or obligations that are accrued and unpaid as of the
Contribution Closing with respect to any of the Transferred Contracts. No Transferred Contract
relates to any of the Excluded Assets.

     3.7 Entire Business. The Transferred Assets comprise all of the non-cash assets,
properties and rights of every type and description, whether real or personal, tangible or
intangible, used or necessary for the conduct of the Business, as it has historically been
conducted by RXi and as it will be conducted by the Company as of the Closing Date.

     3.8 No Brokers’ or Other Fees. No broker, finder or investment banker is entitled to
any fee or commission in connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of RXi.

SECTION 4. CERTAIN TAX COVENANTS.

     4.1 Tax Liability.

          (a) RXi shall be liable for, and shall indemnify and hold RNCS harmless against, all Taxes of,
or payable by RXi, for any taxable year or period ending on or before the Contribution Closing
Date. RXi shall file or cause RNCS to file all Tax Returns relating to RNCS for any taxable year
ending on or before the date hereof. RXi shall be liable for and shall hold RNCS harmless against
any transfer, documentary, sales, use, value added, excise, stock transfer, stamp, recording,
registration and any similar Taxes and fees, including any penalties and interest thereon, that
become payable in connection with the transactions contemplated by this Agreement.

          (b) Subject to 4.1(a), all Taxes levied with respect to the Transferred Assets for a taxable
period that includes (but does not end on) the Contribution Closing Date (collectively, the
“Apportioned Obligations”) shall be apportioned between RXi and RNCS as of the Contribution
Closing Date based on the number of days of such taxable period ending on and including the
Contribution Closing Date (“Pre-Closing Apportioned Period”) and the number of days of such
taxable period beginning from the day after the Contribution Closing Date through the end of such
taxable period (the “Post-Closing Apportioned Period”). RXi shall be liable for the
proportionate amount of Apportioned Obligations that is attributable to the Pre-Closing Apportioned
Period. RNCS shall be liable for the proportionate amount of the Apportioned

8

 

Obligations that is attributable to the Post-Closing Apportioned Period. RNCS shall notify
RXi upon receipt of any bill for real property Taxes, personal property Taxes or similar ad valorem
obligations relating to the Transferred Assets, part or all of which are attributable to the
Pre-Closing Apportioned Period, and shall promptly deliver such bill to RXi, who shall pay the same
to the appropriate Governmental Authority; provided that if such bill also relates to the
Post-Closing Apportioned Period, RXi shall remit, prior to the due date of assessment, to RNCS
payment only for the proportionate amount of such bill that is attributable to the Pre-Closing
Apportioned Period.

     4.2 Refunds or Credits. Any Tax refunds, credits or overpayments attributable to real
property Taxes, personal property Taxes and similar ad valorem obligations levied with respect to
the Transferred Assets shall be apportioned between RXi and RNCS in accordance with the
apportionment provided in Section 4.1(b).

     4.3 Mutual Cooperation. As soon as practicable, but in any event within 30 days after
RXi’s or RNCS’s request, as the case may be, RNCS shall deliver to RXi or RXi shall deliver to
RNCS, such information and other data in the possession of RXi or RNCS, as the case may be,
relating to the tax returns and taxes of RXi, including such information and other data customarily
required by RXi or RNCS, as the case may be, to cause the payment of all taxes or to permit the
preparation of any tax Returns for which it has responsibility or liability or to respond to audits
by any taxing authorities with respect to any tax returns or taxes for which it has any
responsibility or liability under this Agreement, or otherwise, or to otherwise enable RXi or RNCS,
as the case may be, to satisfy its accounting or tax requirements, and shall make available such
knowledgeable employees of RXi or RNCS, as the case may be, as RXi or RNCS may reasonably request.
For a period of seven years after the Contribution Closing Date, and, if at the expiration thereof
any tax audit or judicial proceeding is in progress or the applicable statute of limitations has
been extended, for such longer period as such audit or judicial proceeding is in progress or such
statutory period is extended, RNCS shall maintain and make available to RXi, at RXi’s reasonable
request, copies of any and all information, books and records referred to in this Section 4.3.
After such period, RNCS may dispose of such information, books and records, provided that prior to
such disposition RNCS shall give RXi a reasonable opportunity to take possession of such
information, books and records.

     4.4 Contests. Whenever any taxing authority asserts a claim, makes an assessment or
otherwise disputes or affects the tax reporting position of RXi for periods ending on or prior to
the Contribution Closing Date or the amount of Taxes for which RXi is or may be liable under this
Agreement, RNCS shall, promptly upon receipt by RNCS of notice thereof, inform RXi, and RXi shall
have the right to control any resulting proceedings and to determine whether and when to settle any
such claim, assessment or dispute, to the extent such proceedings or determinations affect the tax
reporting position of RXi for periods ending on or prior to the Contribution Closing Date or the
amount of taxes for which RXi is liable under this Agreement. Whenever any taxing authority
asserts a claim, makes an assessment or otherwise disputes the amount of taxes for which RNCS may
be liable under this Agreement, RXi shall, promptly upon receiving notice thereof, inform RNCS.
RXi shall have the right to control any resulting proceedings and to determine whether and when to
settle any such claim, assessment or dispute, but only to the extent such proceedings affect the
amount of Taxes for which RXi is liable under this

9

 

Agreement, and otherwise RNCS shall control such proceedings and settlements; provided,
however, that RNCS shall not, unless otherwise required by law, take any position on any tax return
or in any contest or proceeding that is inconsistent with this Agreement or a position taken by RXi
and its affiliates with respect to taxes incurred on or prior to the Contribution Closing Date.

     4.5 Resolution of Disagreements. If RXi and RNCS disagree as to the amount for which
each is liable under this Section 4, RXi and RNCS shall promptly consult with each other in an
effort to resolve such dispute. If any such point of disagreement cannot be resolved within 30
days of the date of consultation, RXi and RNCS shall jointly select an independent auditor to act
as an arbitrator to resolve all points of disagreement concerning Tax accounting matters with
respect to this Agreement. The prevailing party in any such dispute, as determined by the auditor
hearing the dispute, shall be entitled to be awarded reasonable fees and expenses, including
reasonable attorneys fees.

SECTION 5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

     5.1 Indemnification by RXi. Subject to Section 5.4, RXi shall indemnify RNCS from and
against Damages incurred by RNCS, and each of its officers and directors and Affiliates, as a
result of any breach of any of the following:

          (a) any breach of a representation or warranty made by RXi in this Agreement;

          (b) any material breach by RXi of any covenant made in this Agreement; and

          (c) RXi’s conduct of the Business prior to the Contribution Closing Date.

     5.2 Indemnification by RNCS. Subject to Section 5.4, RNCS shall indemnify RXi from
and against Damages incurred by RXi, and each of its officers and directors and Affiliates, as a
result of any of the following:

          (a) any failure of RNCS to discharge or perform when due any of the Assumed Obligations; and

          (b) RNCS’s ownership or operation of the Business after the Contribution Closing Date.

     5.3 Third Party Claims. Except as otherwise provided herein, if any Third Party
notifies an Indemnified Party with respect to any matter (a “Third Party Claim”) that may
give rise to an Indemnity Claim against an Indemnifying Party under this Section 5, then the
Indemnified Party will promptly give written notice to the Indemnifying Party; provided,
however, that no delay on the part of the Indemnified Party in notifying the Indemnifying
Party will relieve the Indemnifying Party from any obligation under this Section 5, except to the
extent (and only to the extent) that such delay prejudices the Indemnifying Party. The Indemnifying
Party will be entitled to control the defense of any Third Party Claim. In addition, the

10

 

Indemnifying Party will have the right to participate in the defense of any Third Party Claim
for which it does not assume control. The Indemnified Party may retain separate co-counsel at its
sole cost and expense and participate in the defense of the Third Party Claim for which the
Indemnifying Party has assumed control. If the Indemnifying Party does not elect to control the
defense of a Third Party Claim within 20 days of providing notice of the Third Party Claim, the
Indemnified Party will control the defense of the Third Party Claim at the expense of the
Indemnifying Party. The Indemnified Party will not, however, without the prior written consent of
the Indemnifying Party, consent to the entry of any judgment or enter into any compromise or
settlement with respect to the Third Party Claim.

     5.4 Limitations on Indemnification.

          (a) No indemnification shall be payable to an Indemnified Party pursuant to Section 5 unless
the amount of all claims for indemnification by such Indemnified Party exceeds $25,000 in the
aggregate, and, after all claims for indemnification exceed such amount, the Indemnifying Party
shall be required to indemnify such Indemnified Party with respect to all Damages claimed by such
Indemnified Party.

          (b) The representations and warranties contained in this Agreement shall survive the
Contribution Closing, except that all such representations and warranties shall expire on the date
twenty-four (24) months after the Contribution Closing Date, except with respect to and to the
extent of any claims of which written notice specifying in reasonable detail, the nature and amount
of the claims, has been given prior to such expiration.

     5.5 Exclusive Remedy. The indemnification provisions of this Section 5 shall be the
sole and exclusive remedy of the parties following the Contribution Closing Date with respect to
any matter arising out of this Agreement.

SECTION 6. GENERAL

     6.1 Amendment. This Agreement may not be amended prior to the Contribution Closing
except with the written consent of RXi and RNCS; provided however, that any amendment to this
Agreement between the Contribution Closing Date and the Closing Date shall also require the prior
written consent of the Investors.

     6.2 Further Assurances. Each of the parties agrees to duly execute and deliver, or
cause to be duly executed and delivered, such further instruments and do and cause to be done such
further acts and things, including, without limitation, the execution of such additional
assignments, agreements, documents and instruments, that may be necessary or as another party
hereto may at any time and from time to time reasonably request in connection with this Agreement
or to effect the transactions contemplated hereby, including, without limitation, the
identification, review and assignment, as may be mutually agreed, of any Additional Transferred
Contracts.

     6.3 Fees and Expenses. Whether or not the transactions contemplated hereby are
consummated, the parties each shall bear their own costs and expenses incurred in connection

11

 

with this Agreement and the transactions contemplated hereby, except as provided in Section 5
and in the Purchase Agreement. Except as provided in Section 5 and in the Purchase Agreement, no
portion of the cost and expenses incurred in connection with this Agreement shall be borne by RNCS.

     6.4 Controlling Law; Venue. This Agreement, the rights of the parties hereunder and
all actions arising in whole or in part under or in connection herewith, will be governed by and
construed and enforced in accordance with the domestic substantive laws of the State of California,
without giving effect to any choice or conflict of law provision or rule that would cause the
application of the laws of any other jurisdiction. Each of the parties to this Agreement, by its
execution hereof, (i) hereby irrevocably submits to the exclusive jurisdiction of the United States
District Court located in California, or if such action may not be brought in federal court, the
state courts of the State of California for the purpose of any action among any of the parties
relating to or arising in whole or in part under or in connection with this Agreement; (ii) hereby
waives to the extent not prohibited by applicable legal requirements, and agrees not to assert, by
way of motion, as a defense or otherwise, in any such action, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is exempt or immune
from attachment or execution, that any such action brought in one of the above-named courts should
be dismissed on grounds of forum non conveniens, should be transferred or removed to any court
other than one of the above-named courts, or should be stayed by reason of the pendency of some
other action in any other court other than one of the above-named courts or that this Agreement or
the subject matter hereof or thereof may not be enforced in or by such court; and (iii) hereby
agrees not to commence any such action other than before one of the above-named courts.
Notwithstanding the previous sentence a party may commence any action in a court other than the
above-named courts solely for the purpose of enforcing an order or judgment issued by one of the
above-named courts.

     6.5 Venue. Each of the parties to this Agreement agrees that for any action among any
of the parties relating to or arising in whole or in part under or in connection with this
Agreement, such party shall bring such action only in California. Notwithstanding the previous
sentence a party may commence any action in a court other than the above-named courts solely for
the purpose of enforcing an order or judgment issued by one of the above-named courts. Each party
hereto further waives any claim and will not assert that venue should properly lie in any other
location within the selected jurisdiction.

     6.6 Service of Process. Each of the parties to this Agreement hereby (i) consents to
service of process in any action among any of the parties hereto relating to or arising in whole or
in part under or in connection with this Agreement in any manner permitted by California law; (ii)
agrees that service of process made in accordance with clause (i) or made by registered or
certified mail, return receipt requested, at its address specified pursuant to Section 6.8, will
constitute good and valid service of process in any such action; and (iii) waives and agrees not to
assert (by way of motion, as a defense, or otherwise) in any such action any claim that service of
process made in accordance with clause (i) or (ii) does not constitute good and valid service of
process.

12

 

     6.7 Remedies Cumulative; Specific Performance. The rights and remedies of the parties
hereto shall be cumulative (and not alternative). The parties to this Agreement agree that, in the
event of any breach or threatened breach by any party to this Agreement of any covenant, obligation
or other provision set forth in this Agreement for the benefit of any other party to this
Agreement, such other party shall be entitled (in addition to any other remedy that may be
available to it) to (a) a decree or order of specific performance or mandamus to enforce the
observance and performance of such covenant, obligation or other provision, and (b) an injunction
restraining such breach or threatened breach. The parties hereto acknowledge and agree that the
Investors are intended to be third party beneficiaries under this Agreement.

     6.8 Notices. All notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have been duly given,
made and received when delivered against receipt, upon receipt of a facsimile transmission, pdf or
other electronic transmission, or when deposited in United States mails, first class postage
prepaid, addressed as set forth below:

	 	 	 	 	 
	 

	 	If to RXi:
	 	Galena Biopharma, Inc.
	 

	 	 	 	310 N. State Street, Suite 208
	 

	 	 	 	Lake Oswego, Oregon 07034
	 

	 	 	 	Facsimile number: (503) 400-6611
	 

	 	 	 	Email: mahn@galenabiopharma.com
	 

	 	 	 	Attention: President and Chief Executive Officer
	 
	 	 	 	 
	 

	 	With a copy to:
	 	TroyGould PC
	 

	 	 	 	1801 Century Park East, 16th Floor
	 

	 	 	 	Los Angeles, California 90067
	 

	 	 	 	Facsimile: (310)789-1459
	 

	 	 	 	Email: dshort@troygould.com
	 

	 	 	 	Attention: Dale E. Short
	 
	 	 	 	 
	 

	 	If to RNCS:
	 	c/o Galena Biopharma, Inc.
	 

	 	 	 	310 N. State Street, Suite 208
	 

	 	 	 	Lake Oswego, Oregon 07034
	 

	 	 	 	Facsimile number: (503) 400-6611
	 

	 	 	 	Email: mahn@galenabiopharma.com
	 

	 	 	 	Attention: President and Chief Executive Officer

Any party may alter the address to which communications or copies are to be sent by giving notice
to the other parties of such change of address in conformity with the provisions of this Section
6.8 for the giving of notice. A copy of all notices, requests, demands and other communications
required or permitted under this Agreement shall also be contemporaneously sent to the Investors at
the addresses set forth in the Purchase Agreement.

     6.9 Binding Nature of Agreement; No Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns,

13

 

except that no party may assign or transfer its rights or obligations under this Agreement
without the prior written consent of the other parties hereto and provided further that no rights
or obligations may be assigned prior to the Closing Date without the prior written consent of the
Investors.

     6.10 Entire Agreement. Except as set forth in the Purchase Agreement (including the
Ancillary Agreements as defined therein), this Agreement and the Ancillary Agreements contain the
entire understanding between the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, except as herein contained. The express terms hereof control
and supersede any course of performance and/or usage of the trade inconsistent with any of the
terms hereof.

     6.11 Documents and Exhibits. All documents, schedules, writings and exhibits referred
to herein or delivered pursuant hereto are hereby incorporated by reference into, and made a part
of, this Agreement.

     6.12 Indulgences, Not Waivers. Neither the failure nor any delay on the part of a
party to exercise any right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege
preclude any other or further exercise of the same or any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver, and no waiver shall be granted hereunder prior to the Closing
Date without the prior written consent of the Investors.

     6.13 No Presumption. The parties hereto have participated jointly in the negotiation
and drafting of this Agreement. If any ambiguity or question of intent or interpretation arises,
this Agreement shall be construed as if draft jointly by all the parties hereto and no presumption
or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any
of the provisions of this Agreement.

     6.14 Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any party whose signature
appears thereon, and all of which shall together constitute one and the same instrument. This
Agreement shall become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as the signatories.
This Agreement may be executed as facsimile originals or by other electronic (including, without
limitation, in pdf format) transmission and each copy of this Agreement bearing the facsimile or
other electronically-transmitted signature of the authorized representatives of each of the parties
shall be deemed to be an original.

     6.15 Attorneys’ Fees. If any action at law or suit in equity to enforce or construe
this Agreement or the rights of any of the parties is brought against any party hereto, the
prevailing

14

 

party shall be entitled to recover reasonable attorneys’ fees, costs and disbursements in
addition to any other relief to which the prevailing party may be entitled.

     6.16 Provisions Separable. The provisions of this Agreement are independent and
separable from each other, and no provision shall be affected or rendered invalid or unenforceable
by virtue of the fact that for any reason any other or others of them may be invalid or
unenforceable in whole or in part.

[Signature Page Follows]

15

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

	 	 	 	 	 
	 	RXi PHARMACEUTICALS 

CORPORATION

 	 
	 	By:  	/s/ Mark J. Ahn
 	 
	 	 	Mark J. Ahn, Ph.D. 	 
	 	 	President and Chief Executive Officer 	 
	 
	 	RNCS, Inc.

 	 
	 	By:  	/s/ Mark J. Ahn
 	 
	 	 	Mark J. Ahn, Ph.D. 	 
	 	 	President 	 
	 

	 	 	 	 	 
	 	ATTEST:

 	 
	 	/s/ Caitlin Kontulis
 	 
	 	Caitlin Kontulis, Secretary 	 
	 	 	 
	 

[Signature Page to Contribution Agreement]

 

 

Exhibit Index

	 	 	 
	Exhibit A

	 	Bill of Sale
	 
	 	 
	Exhibit B

	 	Assignment and Assumption Agreement

 

 

EXHIBIT A

Form of Bill of Sale

A-1

 

EXHIBIT B

Form of Assignment and Assumption Agreement

B-1

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