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EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of January 25, 2000 (this
"Agreement"), is made by and between AVANIR PHARMACEUTICALS, a California
corporation, with headquarters located at 0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000,
Xxx Xxxxx, Xxxxxxxxxx 00000-0000 (the "Company"), and the entities named on the
signature page hereto (each, an "Investor," and collectively, the "Investors")
(each agreement with an Investor being deemed a separate and independent
agreement between the Company and such Investor, except that each Investor
acknowledges and consents to the rights granted to each other Investor under
such agreement).
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of the Common Stock
Purchase Agreement, dated as of January 25, 2000, by and among the Investors and
the Company (the "Common Stock Purchase Agreement;" terms not otherwise defined
herein shall have the meanings ascribed to them in the Common Stock Purchase
Agreement), the Company has agreed to issue and sell to the Investors the
Initial Shares, together with the Repriced Shares (collectively, the "Shares");
WHEREAS, the Company has agreed to issue a Warrant to each of the
Investors in connection with the issuance of the Shares; and
WHEREAS, to induce the Investors to execute and deliver the Common Stock
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Shares and the Warrant Shares (as defined
below);
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investors
hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have
the following meanings:
(a) "Potential Material Event" means any of the following: (i)
the possession by the Company of material information not ripe for disclosure in
a Registration Statement, which shall be evidenced by determinations in good
faith by the Board of Directors of the Company that disclosure of such
information in the Registration Statement would be detrimental to the business
and affairs of the Company; or (ii) any material engagement or activity by the
Company which would, in the good faith determination of the Board of Directors
of the Company, be adversely
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affected by disclosure in a Registration Statement at such time, which
determination shall be accompanied by a good faith determination by the Board of
Directors of the Company that the Registration Statement would be materially
misleading absent the inclusion of such information.
(b) "Register," "Registered," and "Registration" refer to a
Registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis, and the declaration or ordering of effectiveness of such
Registration Statement by the United States Securities and Exchange Commission
(the "SEC").
(c) "Registrable Securities" mean the Shares and the Warrant
Shares.
(d) "Registration Statement" means a registration statement of
the Company under the Securities Act, or an amendment to an existing
registration statement.
2. REGISTRATION.
(a) MANDATORY REGISTRATION.
(i) The Company shall prepare and file with the SEC, as
soon as possible after the Initial Closing and no later than a date (the
"Required Filing Date"), which is sixty (60) days following the Initial Closing,
either a Registration Statement on Form S-1 (or such other form that the Company
is eligible to use) or an amendment to an existing Registration Statement, in
either event Registering for resale by the Investors a sufficient number of
shares of Common Stock for the Investors to sell the Registrable Securities (or
such lesser number as may be required by the SEC, but in no event less than (i)
two hundred percent (200%) of the aggregate number of Initial Shares and (ii)
the number of shares of Common Stock that would be issued upon exercise of the
Warrants (the "Warrant Shares") at the time of filing of the Registration
Statement (assuming for such purposes that the Warrants had been eligible to be
exercised and had been exercised in accordance with its terms, whether or not
such eligibility or exercise had in fact occurred as of such date). The
Registration Statement (W) shall include only the Registrable Securities, and
(X) shall state that, in accordance with Rule 416 and 457 under the Securities
Act, it covers such indeterminate number of additional shares of Common Stock as
may become issuable upon repricing of the Initial Shares and the exercise of the
to prevent dilution resulting from stock splits or stock dividends. The Company
will use its reasonable best efforts to cause such Registration Statement to be
declared effective on a date (a "Required Effective Date"), which is no later
than the earlier of (y) five (5) Business Days after notice by the SEC that it
may be declared effective or (z) one hundred five (105) days after the date of
the Initial Closing.
(ii) If at any time (an "Increased Registered Shares
Date"), the number of shares of Common Stock represented by the Registrable
Securities, issued or to be issued as contemplated by the Transaction Documents,
exceeds the aggregate number of shares of Common
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Stock then Registered, the Company shall, within ten (10) Business Days after
receipt of a written notice from the Investors, either: (x) amend the
Registration Statement filed by the Company pursuant to the preceding provisions
of this Section 2, if such Registration Statement has not been declared
effective by the SEC at that time, to Register two hundred percent (200%) of
such Registrable Shares, computed as contemplated by the immediately preceding
subparagraph (i); or (y) if such Registration Statement has been declared
effective by the SEC at that time, file with the SEC an additional Registration
Statement (an "Additional Registration Statement") to Register two hundred
percent (200%) of the shares of Common Stock represented by the Registrable
Shares, computed as contemplated by the immediately preceding subparagraph (i),
that exceed the aggregate number of shares of Common Stock already Registered.
The Company will use its reasonable best efforts to cause such Registration
Statement to be declared effective on a date (a "Required Effective Date") which
is no later than (q) with respect to a Registration Statement under clause (x)
of this subparagraph (ii), the Required Effective Date contemplated by the
immediately preceding subparagraph (i) and (r) with respect to an Additional
Registration Statement, the earlier of (i) five (5) Business Days after notice
by the SEC that it may be declared effective or (ii) sixty (60) days after the
Increased Registered Shares Date.
(b) PAYMENTS BY THE COMPANY.
(i) If the Registration Statement covering the
Registrable Securities is not filed in proper form with the SEC by the Required
Filing Date, the Company will make payment to the Investors in such amounts and
at such times as shall be determined pursuant to this Section 2(b);
(ii) If the Registration Statement covering the
Registrable Securities is not effective by thirty (30) days after the relevant
Required Effective Date or if the Investors are restricted from making sales of
Registrable Securities covered by a previously effective Registration Statement
at any time (the date such restriction commences, a "Restricted Sale Date")
after the Effective Date other than during a Suspension Period (as defined
below), then the Company will make payments to the Investors in such amounts and
at such times as shall be determined pursuant to this Section 2(b);
(iii) The amount (each a "Periodic Amount") to be paid by
the Company to the Investors shall be determined as of each Computation Date (as
defined below) and the Periodic Amount shall be equal to the Periodic Amount
Percentage (as defined below) of the Purchase Price for all of the Initial
Shares for the period from the date following the relevant Required Filing Date,
Required Effective Date or Restricted Sale Date, as the case may be, to the
first relevant Computation Date, and thereafter to each subsequent Computation
Date. The "Periodic Amount Percentage" means (A) two percent (2%) of the
Purchase Price for the period from the date following the relevant Required
Filing Date, Required Effective Date or Restricted Sale Date, as the case may
be, to the first relevant Computation Date (prorated on a daily basis if such
period is less than thirty (30) days), and (B) two percent (2%) of the Purchase
Price to each Computation Date thereafter
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(prorated on a daily basis if such period is less than thirty (30) days). By way
of illustration and not in limitation of the foregoing, if the Registration
Statement for the Registrable Securities relating to the Common Stock and
Warrants issued on the Initial Closing Date is timely filed but is not declared
effective until one hundred sixty-five (165) days after the date of the Initial
Closing, the Periodic Amount will aggregate four percent (4%) of the Purchase
Price (2% for days 105-135, plus 2% for days 136-165).
(iv) Each Periodic Amount will be payable by the Company
in cash or other immediately available funds to the Investors at the end of each
Computation Period, without requiring demand therefor by the Investors.
(v) The parties acknowledge that the damages which may be
incurred by the Investors if the Registration Statement is not filed by the
Required Filing Date or if the Registration Statement has not been declared
effective by a Required Effective Date, including if the right to sell
Registrable Securities under a previously effective Registration Statement is
suspended, may be difficult to ascertain. The parties agree that the Periodic
Amount represents a reasonable estimate on the part of the parties, as of the
date of this Agreement, of the amount of such damages.
(vi) Notwithstanding the foregoing, the amounts payable
by the Company pursuant to this Section 2(b) shall not be payable to the extent
any delay in the effectiveness of the Registration Statement occurs because of
an act of, or a failure to act or to act timely by the Investors or their
counsel, or in the event all of the Registrable Securities may be sold pursuant
to Rule 144 or another available exemption under the Securities Act.
(vii) "Computation Date" means (A) the date which is the
earlier of (1) thirty (30) days after the Required Filing Date, any relevant
Required Effective Date or a Restricted Sale Date, as the case may be, or (2)
the date after the Required Filing Date, such Required Effective Date or
Restricted Sale Date on which the Registration Statement is filed (with respect
to payments due as contemplated by Section 2(b)(i) hereof) or is declared
effective or has its restrictions removed (with respect to payments due as
contemplated by Section 2(b)(ii) hereof), as the case may be, and (B) each date
which is the earlier of (1) thirty (30) days after the previous Computation Date
or (2) the date after the previous Computation Date on which the Registration
Statement is filed (with respect to payments due as contemplated by Section
2(b)(i) hereof) or is declared effective or has its restrictions removed (with
respect to payments due as contemplated by Section 2(b)(ii) hereof), as the case
may be.
3. OBLIGATIONS OF THE COMPANY. In connection with the Registration of the
Registrable Securities, the Company shall do each of the following:
(a) Prepare promptly, and file with the SEC by the Required
Filing Date, a Registration Statement with respect to not less than the number
of Registrable Securities provided in Section 2(a) above, and thereafter use its
reasonable best efforts to cause such Registration
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Statement relating to Registrable Securities to become effective by the Required
Effective Date and keep the Registration Statement effective at all times during
the period (the "Registration Period") continuing until the earliest of: (i) the
date that is two (2) years after the last day of the calendar month following
the month in which the Final Repricing Period ends; (ii) the date when each of
the Investors may sell its Registrable Securities under Rule 144; or (iii) the
date when each of the Investors no longer owns any of the Registrable
Securities, which Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
(b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;
(c) The Company shall permit a single firm of counsel designated
by the Investors to review the Registration Statement and all amendments and
supplements thereto a reasonable period of time (but not less than three (3)
Business Days) prior to their filing with the SEC, and not file any document in
a form to which such counsel reasonably objects.
(d) Notify the Investors and their legal counsel identified to
the Company (which, until further notice, shall be deemed to be Xxxxxxx &
Xxxxxx, ATTN: Xxxxxx Xxxxxxx, Esq.; "Investors' Counsel") (and, in the case of
(i)(A) below, not less than five (5) Business Days prior to such filing) and (if
requested by any such person) confirm such notice in writing no later than one
(1) Business Day following the day (i): (A) when a prospectus or any prospectus
supplement or post-effective amendment to the Registration Statement is proposed
to be filed; (B) whenever the SEC notifies the Company whether there will be a
"review" of such Registration Statement; (C) whenever the Company receives (or a
representative of the Company receives on its behalf) any oral or written
comments from the SEC respect of a Registration Statement (copies or, in the
case of oral comments, summaries of such comments shall be promptly furnished by
the Company to the Investors); and (D) with respect to the Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the SEC or any other Federal or state governmental
authority for amendments or supplements to the Registration Statement or
prospectus or for additional information; (iii) of the issuance by the SEC of
any stop order suspending the effectiveness of the Registration Statement
covering any or all of the Registrable Securities or the initiation of any
proceedings for that purpose; (iv) if at any time any of the representations or
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warranties of the Company contained in any agreement (including any underwriting
agreement) contemplated hereby ceases to be true and correct in all material
respects; (v) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (vi) of the occurrence of
any event that to the best knowledge of the Company makes any statement made in
the Registration Statement or prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, prospectus or other
documents so that, in the case of the Registration Statement or the prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. In addition, the Company shall furnish the Investors with
copies of all intended written responses to the comments contemplated in clause
(C) of this Section 3(d) not later than one (1) Business Day in advance of the
filing of such responses with the SEC so that the Investors shall have the
opportunity to comment thereon;
(e) Furnish to the Investors and Investors' Counsel: (i) promptly
after the same is prepared and publicly distributed, filed with the SEC, or
received by the Company, two (2) copies of the Registration Statement, each
preliminary prospectus and prospectus, and each amendment or supplement thereto;
and (ii) such number of copies of a prospectus, and all amendments and
supplements thereto and such other documents, as the Investors may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by the Investors;
(f) As promptly as practicable after becoming aware thereof,
notify the Investors of the happening of any event of which the Company has
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement or other appropriate filing with the
SEC to correct such untrue statement or omission, and deliver a number of copies
of such supplement or amendment to each Investor as such Investor may reasonably
request;
(g) As promptly as reasonably practicable after becoming aware
thereof, notify the Investors of the issuance by the SEC any notice of
effectiveness or any stop order or other suspension of the effectiveness of the
Registration Statement at the earliest possible time;
(h) Notwithstanding the foregoing, if at any time or from time to
time after the date of effectiveness of the Registration Statement, the Company
notifies the Investors in writing of the existence of a Potential Material
Event, the Investors shall not offer or sell any Registrable Securities, or
engage in any other transaction involving or relating to the Registrable
Securities, from
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the time of the giving of notice with respect to a Potential Material Event
until the Investors receives written notice from the Company that such Potential
Material Event either has been disclosed to the public or no longer constitutes
a Potential Material Event; provided, however, that the Company may not so
suspend the right to such holders of Registrable Securities for more than two
twenty (20) day periods in the aggregate during any 12-month period ("Suspension
Period") with at least a ten (10) Business Day interval between such periods,
during the periods the Registration Statement is required to be in effect;
(i) Use its reasonable efforts to secure and maintain the
designation of all the Registrable Securities covered by the Registration
Statement on the "OTC Bulletin Board" of the National Association of Securities
Dealers, and the quotation of the Registrable Securities on the OTC Bulletin
Board;
(j) Provide a transfer agent for the Registrable
Securities not later than the effective date of the Registration Statement;
(k) Cooperate with each Investor to facilitate the timely
preparation and delivery of certificates for the Registrable Securities to be
offered pursuant to the Registration Statement and enable such certificates for
the Registrable Securities to be in such denominations or amounts as the case
may be, as such Investor may reasonably request, and, within three (3) Business
Days after a Registration Statement which includes Registrable Securities is
ordered effective by the SEC, the Company shall deliver a letter to the transfer
agent substantially in the form of Schedule 3(k)1, and shall cause legal counsel
selected by the Company to deliver, to the transfer agent for the Registrable
Securities (with copies to the Investors) an opinion letter of such counsel
relating to the status of such Registrable Securities covered by such
Registration Statement substantially in the form of Schedule 3(k)2 hereto; and
(l) Take all other reasonable actions necessary to
expedite and facilitate disposition by the Investors of the Registrable
Securities pursuant to the Registration Statement.
4. OBLIGATIONS OF THE INVESTORS. In connection with the Registration of
the Registrable Securities, the Investors shall have the following obligations:
(a) It shall be a condition precedent to the obligations of the
Company to complete the Registration pursuant to this Agreement with respect to
the Registrable Securities of the Investors, that the Investors shall furnish to
the Company such information regarding itself, the Registrable Securities held
by it, and the intended method of disposition of the Registrable Securities held
by it, as shall be reasonably required to effect the Registration of such
Registrable Securities and shall execute such documents in connection with such
Registration as the Company may reasonably request. At least ten (10) days prior
to the first anticipated filing date of the Registration Statement, the Company
shall notify each Investor of the information the Company requires from such
Investor (the "Requested Information") if such Investor elects to have any of
the Registrable
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Securities included in the Registration Statement. If at least two (2) Business
Days prior to the filing date the Company has not received the Requested
Information from such Investor, then the Company need not file the Registration
Statement until receiving the response of such Investor;
(b) Each Investor, by accepting the Registrable Securities,
agrees to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of the Registration Statement
hereunder, unless such Investor has notified the Company in writing of its
election to exclude all of the Registrable Securities from the Registration
Statement; and
(c) Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 3(f)
or 3(g), above, such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Investor receives the copies of the
supplemented or amended prospectus contemplated by Section 3(f) or 3(g).
5. EXPENSES OF REGISTRATION. (a) All reasonable expenses incurred in
connection with Registrations, filings or qualifications pursuant to Section 3,
including, without limitation, all Registration, listing, and qualifications
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company and a fee for a single counsel for the Investors, not exceeding
$3,500 for the Registration Statement covering the Registrable Securities shall
be borne by the Company; and
(b) Except as otherwise provided for in Schedule 5(b) attached
hereto, the Company nor any of its subsidiaries has, as of the date hereof, and
the Company shall not on or after the date of this Agreement, enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Investors in this Agreement or otherwise conflicts with the
provisions hereof. Except as otherwise provided for in Schedule 5(b), the
Company has not previously entered into any agreement granting any registration
rights with respect to any of its securities to any person. Except as otherwise
provided for in this Section 5, and without limiting the generality of the
foregoing, without the written consent of Investors holding at least eighty
percent (80%) of the Shares, the Company shall not grant to any person the right
to request the Company to Register any securities of the Company under the
Securities Act unless the rights so granted are subject in all respects to the
prior rights in full of the Investors set forth herein, and are not otherwise in
conflict or inconsistent with the provisions of this Agreement and the other
Transaction Documents.
6. INDEMNIFICATION. In the event any Registrable Securities are included
in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Investor, the directors, if any, of such Investor, the
officers, if any, of such Investor, each person, if any, who controls such
Investor within the meaning of the Securities Act or the
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Securities Exchange Act of 1934, as amended (the "Exchange Act") (each, an
"Indemnified Party"), against any losses, claims, damages, liabilities or
expenses (joint or several) incurred (collectively, "Claims") to which any
Investor may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such Claims (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations in the Registration Statement, or
any post-effective amendment thereof, or any prospectus included therein: (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any post-effective amendment thereof or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; (ii)
any untrue statement or alleged untrue statement of a material fact contained in
the final prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements therein
were made, not misleading; or (iii) any material violation or alleged material
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation under the Securities Act, the Exchange
Act or any state securities law (the matters in the foregoing clauses (i)
through (iii) being, collectively, "Violations"). Subject to Section 6(b), the
Company shall reimburse such Investor, promptly as such expenses are incurred
and are due and payable, for any legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a) shall not: (I) apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by or on behalf of any
Indemnified Party expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto, if
such prospectus was timely made available by the Company pursuant to Section
3(c) hereof; (II) be available to the extent such Claim is based on a failure of
such Investor to deliver or cause to be delivered the prospectus made available
by the Company; or (III) apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. Each Investor will indemnify
the Company and its officers, directors and agents (each, an "Indemnified
Party") against any claims arising out of or based upon a Violation which occurs
in reliance upon and in conformity with information furnished in writing to the
Company, by or on behalf of such Investor, expressly for use in connection with
the preparation of the Registration Statement, subject to such limitations and
conditions as are applicable to the Indemnification provided by the Company to
this Section 6. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of the Indemnified Party.
(b) Promptly after receipt by an Indemnified Party under this
Section 6 of notice of the commencement of any action (including any
governmental action), such Indemnified Party shall, if a Claim in respect
thereof is to be made against any indemnifying party under this Section 6,
deliver to the indemnifying party a written notice of the commencement thereof
and the
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indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Party, as
the case may be. In case any such action is brought against any Indemnified
Party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with any other indemnifying party similarly notified,
assume the defense thereof, subject to the provisions herein stated and after
notice from the indemnifying party to such Indemnified Party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
Indemnified Party under this Section 6 for any legal or other reasonable
out-of-pocket expenses subsequently incurred by such Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue the action of its
final conclusion. The Indemnified Party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and reasonable out-of-pocket expenses of such counsel shall not be at the
expense of the indemnifying party if the indemnifying party has assumed the
defense of the action with counsel reasonably satisfactory to the Indemnified
Party. The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Party under this Section
6, except to the extent that the indemnifying party is prejudiced in its ability
to defend such action. The indemnification required by this Section 6 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.
7. CONTRIBUTION. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; provided,
however, that: (a) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 6; (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation; and (c)
contribution by any seller of Registrable Securities shall be limited in amount
to the net amount of proceeds received by such seller from the sale of such
Registrable Securities.
8. REPORTS UNDER SECURITIES ACT AND EXCHANGE ACT. With a view to making
available to the Investors the benefits of Rule 144 promulgated under the
Securities Act or any other similar rule or regulation of the SEC that may at
any time permit the Investors to sell securities of the Company to the public
without Registration ("Rule 144"), the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144;
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(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of the Securities
Act and the Exchange Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company and (iii) such other information as may be reasonably requested to
permit such Investor to sell such securities pursuant to Rule 144 without
Registration.
(d) At the request of any holder of any Registrable Securities,
and upon receipt from such holder of a certificate certifying (i) that such
holder has held such Registrable Securities for a period of not less than one
(1) year, (ii) that such holder has not been an affiliate (as defined in Rule
144) of the Company for more than the ninety (90) preceding days, and (iii) as
to such other matters as may be appropriate in accordance with Rule 144, remove
from the stock certificate representing such Registrable Securities that portion
of any restrictive legend which relates to the registration provisions of the
Securities Act; provided however, that, if Xxxxx & XxXxxxxx is not counsel to
the Company, then counsel to Investor may provide such instructions and opinion
to the transfer agent regarding the removal of the restrictive legend.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have the Company
register Registrable Securities pursuant to this Agreement may be assigned by an
Investor to an affiliated entity of such Investor upon such Investor's transfer
or sale of such Registrable Securities to such affiliated entity, subject to the
prior approval of the Company, which approval shall not be withheld
unreasonably.
10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Investors that hold an eighty percent
(80%) interest in the Registrable Securities. Any amendment or waiver effected
in accordance with this Section 10 shall be binding upon each Investor and the
Company.
11. MISCELLANEOUS.
(a) Notices required or permitted to be given hereunder shall be
given in the manner contemplated by the Common Stock Purchase Agreement, if to
the Company or to the Investors, to their respective addresses contemplated by
the Common Stock Purchase Agreement, or at such other address as each such party
furnishes by notice given in accordance with the Common Stock Purchase
Agreement.
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(b) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
(c) This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the jurisdiction
of the federal courts whose districts encompass any part of the County of San
Diego or the state courts of the State of California sitting in the County of
San Diego in connection with any dispute arising under this Agreement and hereby
waives, to the maximum extent permitted by law, any objection, including any
objection based on forum non coveniens, to the bringing of any such proceeding
in such jurisdictions. In the event of any dispute, the prevailing party shall
be entitled to recover its reasonable attorneys' fees.
(d) If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
(e) This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties hereto.
(f) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
(g) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning thereof.
(h) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by telephone line facsimile transmission of
a copy of this Agreement bearing the signature of the party so delivering this
Agreement.
(i) The Company acknowledges that any failure by the Company to
perform its obligations under Section 3(a) hereof, or any delay in such
performance, could result in loss to the Investors, and the Company agrees that,
in addition to any other liability the Company may have by reason of such
failure or delay, the Company shall be liable for all direct damages caused by
any such failure or delay, offset by any Periodic Amount paid to the Investors
pursuant to Sections 2(b)(i)-(ii), unless the same is the result of force
majeure. Neither party shall be liable for consequential damages.
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(j) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof. This Agreement may be amended only by an instrument in writing signed by
the party to be charged with enforcement thereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
COMPANY:
AVANIR PHARMACEUTICALS
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
INVESTORS:
ROSEWORTH GROUP LTD.
By: /s/ Xxxx Xxxxxxx
--------------------------------
Name: Xxxx Xxxxxxx
Title: Director
BAYVIEW LLC
By: /s/ Navigator Management Ltd.
--------------------------------
Name: Navigator Management Ltd.
Title: Director
ENDEAVOUR CAPITAL FUND, S.A.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director
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SCHEDULE 3(k)1
COMPANY LETTER TO TRANSFER AGENT
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SCHEDULE 3(k)2
OPINION LETTER TO TRANSFER AGENT
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SCHEDULE 5(b)
OTHER REGISTRABLE SECURITIES
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