Document:

Unassociated Document

    Exhibit 10.3

     

    
      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

      

      RETAIL
PRO, INC.

       

      
        
          	
                  Warrant
      Shares: 1,000,000

                	 
      	 
      	 
      	
                  Initial
      Exercise Date: June 13, 2008

                

        

      

       

       

      THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies
that, for value received, Midsummer Investment Ltd. (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 the date hereof (the “Initial Exercise
Date”) and on or prior to the close of business on the 4 year anniversary
of the Initial Exercise Date (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Retail Pro, Inc., a
Delaware corporation (the “Company”), up to
1,000,000 shares (the “Warrant Shares”) of
Common Stock.  The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).   This
Warrant is being issued pursuant to Sections 3(a)(9) and 18(b)(4)(C) of the
Securities Act and, as such, pursuant to Rule 144, the holding period of the
Warrants and the Warrant Shares solely upon cashless exercise pursuant to
Section 2(c) herein shall tack back to the initial issuance date of the Original
Notes.

       

      Section
1.   Definitions.  Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Securities Exchange Agreement (the “Exchange Agreement”),
dated June 13, 2008, among the Company and the purchasers signatory
thereto.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Section
2.    Exercise.

       

      a) Exercise of
Warrant.  Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by delivery to 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 the Holder
appearing on the books of the Company) of a duly executed facsimile copy of the
Notice of Exercise Form annexed hereto; and, within 3 Trading Days of the date
said Notice of Exercise is delivered to the Company, the Company shall have
received payment of the aggregate Exercise Price of the shares thereby purchased
by wire transfer or cashier’s check drawn on a United States
bank.  Notwithstanding anything herein to the contrary, the Holder
shall not be required to physically surrender this Warrant to the Company until
the Holder has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall surrender
this Warrant to the Company for cancellation within 3 Trading Days of the date
the final Notice of Exercise is delivered to the Company.  Partial
exercises of this Warrant resulting in purchases of a portion of the total
number of Warrant Shares available hereunder shall have the effect of lowering
the outstanding number of Warrant Shares purchasable hereunder in an amount
equal to the applicable number of Warrant Shares purchased.  The
Holder and the Company shall maintain records showing the number of Warrant
Shares purchased and the date of such purchases.  The Company shall
deliver any objection to any Notice of Exercise Form within 1 Business Day of
receipt of such notice.  In the event of any dispute or discrepancy,
the records of the Holder shall be controlling and determinative in the absence
of manifest error. The Holder
and any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount stated on the
face hereof.

       

      b) Exercise
Price.  The exercise price per share of the Common Stock under
this Warrant shall be $0.08, subject to adjustment
hereunder (the “Exercise
Price”).

       

      c) Cashless
Exercise.  If at any time after the date hereof, there is no
effective registration statement registering, or no current prospectus available
for, the resale of the Warrant Shares by the Holder, then 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
VWAP on the Trading Day immediately preceding the date of such
election;

         

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

         

        (X) = the
number of Warrant Shares issuable upon exercise of this Warrant in accordance
with the terms of this Warrant by means of a cash exercise rather than a
cashless exercise, or if only a portion of this Warrant is being exercised, the
number of Warrant Shares issuable upon such partial exercise.

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
 

      Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be
automatically exercised via cashless exercise pursuant to this Section
2(c).

      

      d) Exercise
Limitations.

       

      
        i.     
Holder’s
Restrictions.  The Company shall not effect any exercise of
this Warrant, and a Holder shall not have the right to exercise any portion of
this Warrant, pursuant to Section 2 or otherwise, to the extent that after
giving effect to such issuance after exercise as set forth on the applicable
Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any
other person or entity acting as a group together with the Holder or any of the
Holder’s Affiliates), would beneficially own in excess of the Beneficial
Ownership Limitation (as defined below).  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 such determination 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  Common Stock Equivalents) 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 2(d)(i), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder, it being acknowledged by the Holder that
the Company is not representing to the Holder that such calculation is in
compliance with Section 13(d) of the Exchange Act and the Holder is solely
responsible for any schedules required to be filed in accordance
therewith.  To the extent that the limitation contained in this
Section 2(d)(i) applies, the determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder together with
any Affiliates) and of which portion of this Warrant is exercisable shall be in
the sole discretion of the Holder, and the submission of a Notice of Exercise
shall be deemed to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder together with
any Affiliates) and of which portion of this Warrant is exercisable, in each
case subject to the Beneficial Ownership Limitation, and the Company shall have
no obligation to verify or confirm the accuracy of such
determination.  In addition, a determination as to any group status as
contemplated above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated 

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        thereunder.  For
purposes of this Section 2(d)(i), in determining the number of outstanding
shares of Common Stock, a Holder may rely on the number of outstanding shares of
Common Stock as reflected in (A) the Company’s most recent periodic or annual
report, as the case may be, (B) a more recent public announcement by the Company
or (C) any other notice by the Company or the Transfer Agent setting forth the
number of shares of Common Stock outstanding.  Upon the written or oral
request of a 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 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 “Beneficial Ownership
Limitation” shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant.  The Holder, upon not
less than 61 days’ prior notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this Section 2(d)(i), provided
that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number
of shares of the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock upon exercise of this Warrant held by the
Holder and the provisions of this Section 2(d)(i) shall continue to
apply.  Any such increase or decrease will not be effective until the
61st
day after such notice is delivered to the Company.  The provisions of
this paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 2(d)(i) to correct this
paragraph (or any portion hereof) which may be defective or inconsistent with
the intended Beneficial Ownership Limitation herein contained or to make changes
or supplements necessary or desirable to properly give effect to such
limitation. The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.

      

       

       

      e) Mechanics of
Exercise.

       

      i. Delivery of Certificates
Upon Exercise.  Certificates for shares purchased hereunder
shall be transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder’s prime broker with the Depository Trust Company through
its Deposit Withdrawal Agent Commission (“DWAC”) system if the
Company is then a participant in such system and either (A) there is an
effective registration statement permitting the resale of the Warrant Shares by
the Holder, or (B) the shares are eligible for resale without volume or
manner-of-sale limitations pursuant to Rule 144, and otherwise by physical
delivery to the address specified by the Holder in the Notice of Exercise within
3 Trading Days from the delivery to the Company of the Notice of
Exercise

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Form,
surrender of this Warrant (if required) and payment of the aggregate Exercise
Price as set forth above (the “Warrant Share Delivery
Date”).  This Warrant shall be deemed to have been exercised on
the date the Exercise Price is received by the Company.  The Warrant
Shares shall be deemed to have been issued, and 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 (or by cashless exercise, if
permitted) and all taxes required to be paid by the Holder, if any, pursuant to
Section 2(e)(vi) prior to the issuance of such shares, have been paid. If the
Company fails for any reason to deliver to the Holder certificates evidencing
the Warrant Shares subject to a Notice of Exercise by the second Trading Day
following the Warrant Share Delivery Date, the Company shall pay to the Holder,
in cash, as liquidated damages and not as a penalty, for each $2,000 of Warrant
Shares subject to such exercise (based on the VWAP of the Common Stock on the
date of the applicable Notice of Exercise), $10 per Trading Day (increasing to
$20 per Trading Day on the fifth Trading Day after such liquidated damages begin
to accrue) for each Trading Day after such second Trading Day following the
Warrant Share Delivery Date until such certificates are delivered.

       

      ii. Delivery of New Warrants
Upon Exercise.  If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this
Warrant certificate, 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.

       

      iii. Rescission
Rights.  If the Company fails to cause the Transfer Agent to
transmit to the Holder a certificate or the certificates representing the
Warrant Shares pursuant to Section 2(e)(i) by the Warrant Share Delivery Date,
then, the Holder will have the right to rescind such exercise at any time prior
to its receipt of such certificate or certificates.

       

      iv. Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise.  In
addition to any other rights available to the Holder, if the Company fails to
cause the Transfer Agent to transmit to the Holder a certificate or the
certificates representing the Warrant Shares pursuant to an exercise on or
before the Warrant Share Delivery Date, and if after such date 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 (A) 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 amount
obtained by multiplying (1) the number of Warrant Shares that the Company was
required to deliver to the Holder in connection with the exercise at issue times
(2) the price at which the sell order giving rise to such purchase obligation
was executed, and (B) 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 (A) 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 of such loss 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.

       

      v. 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, at its election, either pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.

       

      vi. 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.

       

      vii. 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.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Section
3.  Certain
Adjustments.

       

      a) Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding:
(i) pays a stock dividend or otherwise make a distribution or distributions on
shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger
number of shares, (iii) combines (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares, or (iv)
issues by reclassification of shares of the Common Stock any shares of capital
stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding immediately before such
event and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event and the number of shares issuable upon
exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged.  Any
adjustment made pursuant to this Section 3(a) shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.

       

      b) [RESERVED]

       

      c) Subsequent Rights
Offerings.  If the Company, at any time while the Warrant is
outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to Holders) entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the VWAP at the record date
mentioned below, then, the Exercise Price shall be multiplied by a fraction, of
which the denominator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of additional shares of Common Stock offered for subscription or purchase, and
of which the numerator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of shares which the aggregate offering price of the total number of shares so
offered (assuming receipt by the Company in full of all consideration payable
upon exercise of such rights, options or warrants) would purchase at such
VWAP.  Such adjustment shall be made whenever such rights or warrants
are issued, and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights, options or
warrants.

       

      d) Pro Rata
Distributions.  If the Company, at any time while this Warrant
is outstanding, shall distribute to all holders of Common Stock (and not to
Holders of the Warrants) evidences of its indebtedness or assets (including cash
and cash dividends) or rights or warrants to subscribe for or purchase any
security other than the Common Stock (which shall be subject to Section 3(b)),
then in each such case the Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution by a
fraction of which the denominator shall be the VWAP determined as of the record
date mentioned above, and of which the numerator shall be such VWAP on such
record date less the then per share fair market value at such record date of the
portion of such assets or evidence of indebtedness so distributed applicable to
one outstanding share of the Common Stock as determined by the Board of
Directors in good faith.  In either case the adjustments shall be
described in a statement provided to the Holder of the portion of assets or
evidences of indebtedness so distributed or such subscription rights applicable
to one share of Common Stock.  Such adjustment shall be made whenever
any such distribution is made and shall become effective immediately after the
record date mentioned above.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      e) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the
Company effects any merger or consolidation of the Company with or into another
Person, (ii) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (iii) any tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (each “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, the number of shares of Common Stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate
Consideration”) receivable as a result of such 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. For purposes
of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration.  If holders of Common Stock are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental
Transaction.  To the extent necessary to effectuate the foregoing
provisions, any successor to the Company or surviving entity in such Fundamental
Transaction shall issue to the Holder a new warrant consistent with the
foregoing provisions and evidencing the Holder’s right to exercise such warrant
into Alternate Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this Section 3(e)
and insuring that this Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction. Notwithstanding anything to the contrary, in the event of a
Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule 13e-3
transaction” as defined in Rule 13e-3 under the Exchange Act, or (3) a
Fundamental Transaction involving a person or entity not traded on a national
securities exchange, the Nasdaq Global Select Market, the Nasdaq Global Market,
or the Nasdaq Capital Market, the Company or any successor entity shall pay at
the Holder’s option, exercisable at any time concurrently with or within 30 days
after the consummation of the Fundamental Transaction, an amount of cash equal
to the value of this Warrant as determined in accordance with the Black Scholes
Option Pricing Model obtained from the “OV” function on Bloomberg L.P. using (A)
a price per share of Common Stock equal to the VWAP of the Common Stock for the
Trading Day immediately preceding the date of consummation of the
applicable  Fundamental Transaction, (B) a risk-free interest rate
corresponding to the U.S. Treasury rate for a 30 day period immediately prior to
the consummation of the applicable Fundamental Transaction, (C) an expected
volatility equal to the 100 day volatility obtained from the “HVT” function on
Bloomberg L.P. determined as of the Trading Day immediately following the public
announcement of the applicable Fundamental Transaction and (D) a remaining
option time equal to the time between the date of the public announcement of
such transaction and the Termination Date.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      f) Calculations. All
calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be.  For purposes of this
Section 3, the number of shares of Common Stock deemed to be issued and
outstanding as of a given date shall be the sum of the number of shares of
Common Stock (excluding treasury shares, if any) issued and
outstanding.

       

      g) Notice to
Holder.

       

      i. Adjustment to Exercise
Price. Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly mail to the Holder a notice
setting forth the Exercise Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. If the Company enters into a
Variable Rate Transaction, despite the prohibition thereon in the Exchange
Agreement, the Company shall be deemed to have issued Common Stock or Common
Stock Equivalents at the lowest possible conversion or exercise price at which
such securities may be converted or exercised.

       

      ii. Notice to Allow Exercise by
Holder.  If (A) the Company shall declare a dividend (or any
other distribution in whatever form) on the Common Stock, (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights, (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property, or (E) the Company shall authorize the voluntary
or involuntary dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be mailed to the Holder
at its last address as it shall appear upon the Warrant Register of the Company,
at least 20 calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange
is expected to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange; provided that the
failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice.  The Holder is entitled to exercise this Warrant
during the period commencing on the date of such notice to the effective date of
the event triggering such notice.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Section
4.   Transfer of
Warrant.

       

      a) Transferability.  Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 4(d) hereof and to the provisions of Section 4.1 of the Exchange
Agreement, this Warrant and all rights hereunder (including, without limitation,
any registration rights) are transferable, in whole or in part, upon surrender
of this Warrant at the principal office of the Company or its designated agent,
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, as applicable, 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.  The Warrant, if properly
assigned, may be exercised by a new holder for the purchase of Warrant Shares
without having a new Warrant issued.

       

      b) New Warrants. 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 4(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. All Warrants issued on transfers or exchanges shall be dated
the Initial Exercise Date and shall be identical with this Warrant except as to
the number of Warrant Shares issuable pursuant thereto.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      c) Warrant
Register.  The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time.  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.

       

      d) Transfer
Restrictions. 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
either (i) registered pursuant to an effective
registration statement under the Securities
Act and under applicable state securities
or blue sky laws or (ii) eligible for
resale without volume or manner-of-sale restrictions pursuant to Rule
144, the Company may require, as a
condition of allowing such transfer, that
the Holder or transferee of this Warrant,
as the case may be, comply with the
provisions of Section 5.7 of the Exchange Agreement.

       

      Section
5.   Miscellaneous.

       

      a) No Rights as Stockholder
Until Exercise.  This Warrant does not entitle the Holder to
any voting rights or other rights as a stockholder of the Company prior to the
exercise hereof as set forth in Section 2(e)(i).

       

      b) 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 (which, in the case of the Warrant, shall
not include the posting of any bond), 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.

       

      c) 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 not
be a Business Day, then, such action may be taken or such right may be exercised
on the next succeeding Business Day.

       

      d) 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.  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 created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Except
and to the extent as waived or consented to by the Holder, such consent or
waiver not to be unreasonably withheld or delayed, 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 necessary to protect the rights
of Holder as set forth in this Warrant against impairment.  Without
limiting the generality of the foregoing, the Company will (i) 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, (ii) take all such
action as may be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Warrant Shares upon the exercise of this
Warrant, and (iii) 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.

       

      e) Jurisdiction. All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the provisions of the
Exchange Agreement.

       

      f) 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.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      g) 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 the fact that 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.

       

      h) 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 Exchange Agreement.

       

      i) Limitation of
Liability.  No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant to 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.

       

      j) Remedies.  The
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 and not to
assert the defense in any action for specific performance that a remedy at law
would be adequate.

       

      k) 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 the Holder or holder of Warrant Shares.

       

      l) Amendment.  This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and Holders holding Warrants at least equal to
67% of the Warrant Shares issuable upon exercise of all then outstanding
Warrants.

       

      m) 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.

       

      n) 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.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      o) Prohibited
Issuances.  As long as any portion of this Warrant remains
outstanding,  the Company shall not, and shall not permit any of its
subsidiaries (whether or not a Subsidiary on the Closing Date) to, directly or
indirectly, without the prior written consent of the Holder, other than an Exempt Issuance, sell or grant any option
to purchase or sell or otherwise dispose of or issue any Common Stock or Common
Stock Equivalents entitling any Person to acquire shares of Common Stock at an
effective price per share that is lower than the then Exercise Price (such an
issuance, a “Dilutive Issuance”) (if the holder of the Common Stock or Common
Stock Equivalents so issued shall at any time, whether by operation of purchase
price adjustments, reset provisions, floating conversion, exercise or exchange
prices or otherwise, or due to warrants, options or rights per share which are
issued in connection with such issuance, be entitled to receive shares of Common
Stock at an effective price per share that is lower than the Exercise Price,
such issuance shall be deemed to have occurred for less than the Exercise Price
on such date of the Dilutive Issuance in violation of this Section.

       

      

       

      

      ********************

      

      

      (Signature
Pages Follow)

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      

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

       

      

      RETAIL
PRO, INC.

       

       

      By:
_____________________________

      Name:

      Title:

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      

      

      NOTICE
OF EXERCISE

      

      TO:           RETAIL
PRO, INC.

      

      (1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company
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

       

      [_] [if
permitted] the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 2(c), to exercise this
Warrant with respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection
2(c).

       

      (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 DWAC Account Number or by
physical delivery of a certificate to:

      

      _______________________________

      

      _______________________________

      

      _______________________________

      

      (4)  Accredited
Investor.  The undersigned is an “accredited investor” as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.

      

      [SIGNATURE
OF HOLDER]

      

      Name of
Investing Entity:
________________________________________________________________________

      Signature of Authorized Signatory of
Investing Entity:
_________________________________________________

      Name of
Authorized Signatory:
___________________________________________________________________

      Title of
Authorized Signatory:
____________________________________________________________________

      Date:
________________________________________________________________________________________

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

       

      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, [____] all of or [_______] shares of 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.QuickLinks
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Exhibit 10.22    
    

Exhibit B  

 
 

CYDEX, INC.
  SEVERANCE COMPENSATION AGREEMENT FOLLOWING
  CHANGE IN CONTROL    
    

        This Severance Compensation Agreement (the "Agreement") is made as of May 19, 2008, by and between  CYDEX, INC., a Delaware corporation (the "Company") and Theron Odlaug
("Executive"). 

        WHEREAS, the Company believes it to be in its best interest to reinforce and encourage the continued attention and dedication of selected
members of the Company's management, including Executive, to their assigned duties without distraction in potentially disturbing circumstances arising from the possibility of a change in control of
the Company; and 

        WHEREAS, this Agreement sets forth the severance compensation which the Company agrees it will pay to Executive if Executive's employment
with the Company terminates following a Change in Control, as defined herein. 

        NOW, THEREFORE, in consideration of these premises, the parties agree that the following shall constitute the agreement between the
Company and Executive: 

1.    DEFINITIONS.    

        (a)    Base Salary.    For purposes of this Agreement, "Base Salary" means the salary of record paid to Executive as
annual salary, excluding amounts received under any incentive or other bonus plan, whether or not deferred and whether paid in cash or in stock or stock options. 

        (b)    Change in Control.    For purposes of this Agreement, a "Change in Control" shall be deemed to occur if the
conditions set forth in any of the following are satisfied:

           (i)  any "person", as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") (other than the Company, any trustee, or other fiduciary holding securities under an employee benefit plan of the Company or any
corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company), or group of persons, together with its
affiliates, are or become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such person any securities acquired directly from the Company) representing more than fifty percent (50%) of the combined voting power of the Company's then
outstanding securities (calculated in accordance with Section 13(d)(3) or 14(d) of the Exchange Act) entitled to vote for the election of the Company's Board of Directors (the
"Board"); 

         (ii)  during any period of two (2) consecutive years (not including any period beginning prior to the effective date of this Agreement),
individuals who at the beginning of such period constitute the Board, and any new Board member (other than a Board member designated by a person who has entered into an agreement with the Company to
effect a transaction described in paragraph (i), (iii) or (iv) of this subsection 1(b)) whose election by the Board or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds of the Board members then still in office who either were Board members at the beginning of the period or whose election or nomination for
election previously was so approved, cease for any reason to constitute at least two-thirds of the Board; 

        (iii)  the closing of a merger or consolidation of the Company with any other person, other than (1) a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities for the
surviving entity) more than fifty percent (50%) of 

 

the
combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (2) a merger in which no "person" (as
defined in subsection 1(b)(i)) acquires more than fifty percent (50%) of the combined voting power of the Company's then outstanding securities; or 

         (iv)  the closing of a complete liquidation of the Company or the sale or disposition by the Company of all or substantially all of the Company's
assets (or any transaction having a similar effect). 

        (c)    Qualifying Termination.    For purposes of this Agreement, "Qualifying Termination" means a "separation from
service" with the Company within the meaning of Treas. Reg. Section 1.409A-1(h) in which any one of the following events also occurs:

           (i)  within six (6) months prior to a Change in Control, an involuntary termination of Executive's employment by the Company that
is in
contemplation of, and caused by, such Change in Control, such Change in Control is pending at the time of such termination and such Change in Control actually occurs; provided that such termination
shall not be a Qualifying Termination if circumstances constituting Cause exist; 

          (ii)  within two (2) years following a Change in Control, an involuntary termination of Executive's employment by the Company for reasons
other
than Cause, the failure or refusal by a successor company to assume the Company's obligations under this Agreement, as required by Section 5(d) herein, or a breach by the Company or any
successor company of any of the provisions of this Agreement; or 

       (iii)  a voluntary termination of employment by the Executive within ninety (90) days following the occurrence of Good Reason, if such Good
Reason occurs within two (2) years following a Change in Control. 

        (d)    Good Reason.    For purposes of this Agreement, "Good Reason" means the occurrence of any of the following,
without the Executive's express written consent, within two (2) years after a Change in Control:

          (i)  any reduction of the Executive's Base Salary or any Company incentive compensation plan target participation level in comparison to
the highest
Base Salary or target participation level in effect for the Executive during the twelve (12) months preceding a Change in Control; 

          (ii)  any failure to continue in effect the Executive's eligibility for any retirement, deferred compensation, vacation, life insurance,
medical,
dental, accident, disability or other employee benefit arrangement, policy, program or plan, other than the Company's short-term and/or long-term incentive compensation plans
(which arrangements, policies, programs or plans shall be referred to herein as "plans"), in which the Executive was entitled to participate immediately
prior to the Change in Control; provided, however, that reductions in the levels of participation in any such plans or substitution of a different plan
shall not be deemed to be Good
Reason if the Executive's reduced level of participation in each such plan remains, or the substitution is, substantially consistent with the average level of participation of other Executives in
positions commensurate with the Executive's position; and further provided, that an increase in the Executive's contributions in any such plan shall not
be deemed to be Good Reason if the Executive's increased level of contribution in each such plan remains substantially consistent with the average level of contribution of other Executives in
positions commensurate with the Executive's position; or 

        (iii)  the Executive is requested to relocate to an office outside of the metropolitan area in which the Executive was principally located immediately
prior to the Change in Control. 

2

 

        (e)    Cause.    For purposes of this Agreement, "Cause" means:

           (i)  the Executive's willful violation of any reasonable rule or direct order of the Board or the Company's Chief Executive Officer,
which, after
written notice to do so, the Executive fails to make reasonable efforts to correct within a reasonable time; 

          (ii)  conviction of a crime, or entry of a plea of nolo contendere with regard to a crime,
involving
actual moral turpitude or dishonesty of or by the Executive; or 

        (iii)  any action or omission constituting cause or reason under any written employment agreement between the Executive and the Company in effect
immediately prior to the Change in Control. 

        "Cause"
shall not include any matter other than those specified in (i) through (iii) above. 

2.    TERMINATION AFTER CHANGE IN CONTROL.    Upon the occurrence of any Qualifying
Termination (as defined above):

        (a)   The Company shall pay, as severance pay in a lump sum on the tenth (10th) business day following the date of termination, an amount equal
to:

           (i)  the Base Salary; plus 

          (ii)  one-twelfth (1/12) of the Base Salary for each Year of Employment of such Executive by the Company up to an aggregate amount payable
under this clause (ii) of one times Base Salary; plus 

       (iii)  any and all bonuses, if applicable, paid by the Company to Executive for the fiscal year ending immediately before the Change in Control of the
Company. 

        For
purposes of this section, "Year of Employment" shall include a period of less than twelve (12) months. 

        (b)   Executive, at the Company's cost, shall be entitled to continuation of coverage for twelve (12) months (beginning
with the month subsequent to the effective date of the termination) under all Company paid or partially paid health, disability or group life insurance plans or any retirement, pension or profit
sharing plans, in each case at such level as had been available to and selected by Executive immediately prior to the Change in Control. 

        (c)   If any of the payments contemplated by this Agreement or any other compensation, benefit or other amount
("Parachute Payments") will be subject to the tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code") (including any interest and penalties, the "Excise Tax"), no Parachute Payment shall be reduced
(except for required tax withholdings) and the Company shall pay to Executive by the earlier of the date such Excise Tax is withheld from payments made to Executive or the date such Excise Tax becomes
due and payable by Executive, an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction
of any Excise Tax and any taxes on the Excise Tax, shall be equal to the amount Executive would have received if no Excise Tax had been imposed. For purposes of determining the Gross-Up
Payment, Executive shall be deemed to pay taxes at the tax rate applicable at the time of the Gross-Up Payment. In the event that the Excise Tax is subsequently determined to be a
different amount than the amount taken into account hereunder at the time a Parachute Payment is made, the Gross-Up Payment shall be adjusted accordingly at the time that the amount of
such difference is finally determined. The Company shall reimburse Executive for all reasonable fees, expenses and costs incurred by Executive related to the Excise Tax or the Gross-Up
Payment, including but not limited to (i) the determination of the reasonableness of any Company position, (ii) the preparation of any tax return or other tax filing, or (iii) any
audit, litigation or other proceeding. 

3

 

3.    ARBITRATION OF DISPUTES.    

        (a)   Any dispute or claim arising out of or relating to this Agreement or any termination of Executive's employment shall be settled by final
and
binding arbitration in Overland Park, Kansas in accordance with the Commercial Arbitration rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. 

         (b)   The Company shall reimburse Executive for any attorneys' fees and expenses incurred by Executive related to any arbitration hereunder,
including
any actions taken by either party to appeal or enforce the judgment rendered therein. Such reimbursement shall be made by direct payment to Executive upon delivery to the Company of valid invoices
and/or receipts relating to such attorneys' fees and expenses. 

         (c)   Except as contemplated in subparagraph (d), the fees and expenses of the arbitration panel shall be borne by the Company.

         (d)   In the event Executive does not submit to arbitration hereunder or submits to arbitration but later seeks to nullify or reverse the
effect of
such arbitration by alleging that arbitration is unenforceable against him, the Company shall be relieved of all payment obligations under subparagraph (b) and (c), above. 

4.    MITIGATION.    Executive shall have no duty to attempt to mitigate the level
of benefits payable by the Company to him hereunder, nor shall the amount of any payment provided for under this Agreement be reduced by any compensation earned by Executive as the result of
employment by another employer after the date of any Qualifying Termination or otherwise. 

5.    GENERAL PROVISIONS.    

        (a)    Law Governing.    This Agreement shall be governed by and construed in accordance with the laws of the State of
Kansas. 

        (b)    Invalid Provisions.    If any provision of this Agreement is held to be illegal, invalid or unenforceable, such
provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. Furthermore, in lieu of such illegal,
invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a provision as
similar in terms to such illegal, invalid or unenforceable provision as may be possible and still be legal, valid or enforceable. 

        (c)    Entire Agreement.    This Agreement sets forth the entire understanding of the parties and supersedes all prior
agreements or understandings, whether written or oral, with respect to the subject matter hereof. No terms, conditions or warranties, other than those contained herein, and no amendments or
modifications hereto shall be binding unless made in writing and signed by the parties hereto. 

        (d)    Binding Effect.    This Agreement shall extend to and be binding upon and inure to the benefit of the parties
hereto, their respective heirs, representatives, successors and assigns. This Agreement may not be assigned by Executive. 

        (e)    Waiver.    The waiver by either party hereto of a breach of any term or provision of this Agreement shall not
operate or be construed as a waiver of a subsequent breach of the same provision by any party or of the breach of any other term or provision of this Agreement. 

        (f)    Titles.    Titles of the paragraphs herein are used solely for convenience and shall not be used for
interpretation or construing any work, clause, paragraph or provision of this Agreement. 

4

 

        (g)    Counterparts.    This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original, but which together shall constitute one and the same instrument. 

6.    COMPLIANCE WITH INTERNAL REVENUE CODE
SECTION 409A.    

         (a)   All payments provided under this Agreement are intended to constitute separate payments for purposes of Treas. Reg.
Section 1.409A-2(b)(2). If Executive is a "specified employee" of the Company or any affiliate thereof (or any successor entity thereto) within the meaning of
Section 409A(a)(2)(B)(i) of the Code on the date of any Qualifying Termination, then any lump sum severance payment pursuant to Section 2(a) (the "Severance
Payment") shall be delayed until the earlier of: (i) the date that is six (6) months after the date of the Qualifying Termination, or (ii) the date of
Executive's death (such date, the "Delayed Payment Date"), and the Company (or the successor entity thereto, as applicable) shall pay to Executive the
Severance Payment in a lump sum on the Delayed Payment Date, without any adjustment on account of such delay. 

        (b)   If Executive is a "specified employee" of the Company or any affiliate thereof (or any successor entity thereto) within the meaning of
Section 409A(a)(2)(B)(i) of the Code on the date of any Qualifying Termination, then any continuing coverage payments by the Company pursuant to Section 2(b) that either (i) are
not otherwise excluded from the definition of a "nonqualified deferred compensation plan" pursuant to Treas. Reg. Section 1.409A-1(a)(5), or (ii) are amounts reimbursed for
medical expenses that otherwise provide for a deferral of compensation pursuant to Treas. Reg. Section 1.409A-1(b)(9)(v)(B) (the "Continuing Coverage
Payments") shall not be provided by the Company (and Executive shall make his own provisions for such continuing coverage) until the earlier of: (x) the date that is six
(6) months after the date of the Qualifying Termination, or (y) the date of Executive's death (such date, the "Delayed Initial Continuing Coverage Payment
Date"), and the Company (or the successor entity thereto, as applicable) shall (A) pay to Executive a lump sum amount equal to the sum of the Continuing Coverage
Payments that otherwise would have been paid on Executive's behalf on or before the Delayed Initial Continuing Coverage Payment Date, without any adjustment on account of such delay, and
(B) continue the Continuing Coverage Payments in accordance with any applicable payment schedules set forth herein for the balance of the twelve (12)-month period. 

        (c)   The Gross-Up Payment provided under Section 2(c) shall be paid by the end of Executive's taxable year next following the
Executive's taxable year in which the Executive remits the related taxes as provided under Treas. Reg. Section 1.409A-3(i)(1)(v). 

        IN WITNESS WHEREOF, the Company and Executive have executed this Agreement as of the date and year first written above. 

        THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.

	EXECUTIVE:	 	CYDEX, INC.
	

/s/ THERON ODLAUG
	
 	

/s/ JOHN M. SIEBERT

	Name: Theron Odlaug	 	By: John M. Siebert
	Title: President & COO	 	Title: Chairman & CEO

        May 6,
2008 

5

QuickLinks

Exhibit 10.22

CYDEX, INC. SEVERANCE COMPENSATION AGREEMENT FOLLOWING CHANGE IN CONTROL

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