REGISTRATION RIGHTS AGREEMENT
EXHIBIT
10.7
This Registration Rights Agreement (this “Agreement”) is made and entered into as of May 24,
2006, by and among Avanir Pharmaceuticals, a California corporation (the “Company”) and Xxxx X.
Xxxxxx (“Xxxxxx”).
This Agreement is made pursuant to the Unit Purchase Agreement, dated as of May 22, 2006,
among the Company, Alamo Pharmaceuticals, LLC and the Parties listed on Schedule A attached to the
Unit Purchase Agreement (the “Purchase Agreement”).
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for
other good and valuable consideration the receipt and adequacy of which are hereby acknowledged,
the Company and Xxxxxx agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the respective meanings set
forth in this Section 1:
“Advice” shall have the meaning set forth in Section 6(b).
“Buyer Notes” shall have the meaning set forth in the Purchase Agreement.
“California Courts” shall have the meaning set forth in Section 6(h).
“Commission” means the United States Securities and Exchange Commission.
“Common Stock” means the Class A common stock, no par value, of the Company.
“Effectiveness Period” shall have the meaning set forth in Section 2(a).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Holder” or “Holders” means the holder or holders, as the case may be, from time to time of
Registrable Securities.
“Indemnified Party” shall have the meaning set forth in Section 5(c).
“Indemnifying Party” shall have the meaning set forth in Section 5(c).
“Losses” shall have the meaning set forth in Section 5(a).
“Person” means any individual, partnership, firm, corporation, limited liability company,
association, trust, unincorporated organization or other entity, as well as any syndicate or group
that would be deemed to be a person under Section 13(d)(3) of the Exchange Act.
“Plan of Distribution” has the meaning set forth in Section 2(a).
“Prepayment Election Date” has the meaning set forth in the Buyer Notes.
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition), whether commenced or
threatened.
“Prospectus” means the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a prospectus filed
as part of an effective registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by a Registration Statement,
and all other amendments and supplements to the Prospectus, including post-effective amendments,
and all material incorporated by reference or deemed to be incorporated by reference in such
Prospectus.
“Registrable Securities” means the Repayment Stock, together with any securities issued or
issuable with respect thereto upon any stock split, dividend or other distribution,
recapitalization or similar event.
“Registration Statement” means each of the registration statement that is required to register
the resale of the Registrable Securities, including the Prospectus, amendments and supplements to
such registration statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
“Repayment Stock” means the Common Stock issued upon the conversion of the Buyer Notes.
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.
“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.
“Rule 416” means Rule 416 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.
“Securities Act” means the Securities Act of 1933, as amended.
2. Registration.
(a) In the event the Company determines that it may desire to issue Repayment Stock in
satisfaction of the Buyer Notes in accordance with the terms thereof, the Company may prepare and
file with the Commission a Registration Statement covering the resale of all Registrable Securities
not already covered by an existing and effective Registration Statement for an offering to be made
on a continuous basis pursuant to Rule 415. In such event, the Registration Statement shall be on
Form S-3 (except if the Company is not then eligible to register for resale the Registrable
Securities on Form S-3, in which case such registration shall be on another appropriate form for
such purpose) and shall contain (except if otherwise required pursuant to written comments received
from the Commission upon a review of such Registration Statement) the “Plan of Distribution” in
substantially the form attached hereto as Annex A (with such changes as required by law or
as reasonably agreed to by the parties hereto, the “Plan of Distribution”). The Company shall
cause the Registration Statement to be declared effective under the Securities Act as soon as
possible, but in no event later than 180 calendar days from the occurrence of the Trigger Event (as
defined in the Buyer Notes); provided, however that the Company shall have an additional 60
calendar days to respond to and resolve any comments from the Securities and Exchange Commission on
the Registration Statement and any documents incorporated by reference therein. The Company shall
use its reasonable best efforts to keep the Registration Statement continuously effective under the
Securities Act until the date that is two years after the date that the Company issues the
Repayment Stock (provided that such two-year period will be extended by the amount of time the
Registration Statement ceases to be effective for any reason) or such earlier date when all
Registrable Securities covered by the Registration Statement have been sold or may be sold without
volume restrictions pursuant to Rule 144(k) (the “Effectiveness Period”). Such Registration
Statement shall also cover, to the extent allowable under the Securities Act and the rules and
regulations promulgated thereunder (including Rule 416), such indeterminate number of additional
shares of Common Stock resulting from stock splits, stock dividends or similar transactions with
respect to the Registrable Securities.
(b) Unless otherwise agreed to in writing by a Holder (but only with respect to the delivery
of Common Stock to such Holder), the Company shall not be permitted to satisfy any portion of the
Buyer Notes by the issuance of Common Stock unless the Registration Statement has been declared
effective by the Commission on or prior to the Prepayment Election Date.
3. Registration Procedures
In connection with the Company’s registration obligations hereunder, the Company shall:
(a) Not less than four Trading Days prior to the filing of the Registration Statement or any
related Prospectus or any amendment or supplement thereto, furnish to the Holders copies of all
such documents proposed to be filed (other than those incorporated by reference), and shall not
file the Registration Statement or any such Prospectus or any amendments or supplements thereto to
which the Holders of a majority of the Registrable
Securities shall reasonably object in good faith prior to the close of business on the fourth
Business Day after such Registration Statement and Prospectus are provided.
(b) (i) Prepare and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement and the Prospectus used in connection therewith as may be
necessary to keep such Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period; (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to
be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any comments
received from the Commission with respect to the Registration Statement or any amendment thereto;
(iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act
with respect to the Registration Statements and the disposition of all Registrable Securities
covered by each Registration Statement; (v) use reasonable best efforts to cause the Registration
Statement and any amendment thereto, as of its effective date, not to contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and (vi) use its reasonable best efforts to
cause the Prospectus included in the Registration Statement or any amendment or supplements to the
Prospectus not to include any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in light of the
circumstances in which they are made, not misleading.
(c) Notify the Holders as promptly as reasonably possible: (i) with respect to the
Registration Statement or any post-effective amendment, when the same has been declared effective;
(ii) of any request by the Commission or any other federal or state governmental authority for
amendments or supplements to a Registration Statement or Prospectus or for additional information
that pertains to the Holders as selling stockholders under the Registration Statement or the Plan
of Distribution; (iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any Proceedings for that purpose;
and (iv) of the occurrence of any event or passage of time that, to the Company’s knowledge, makes
the financial statements included in the Registration Statement ineligible for inclusion therein or
any statement made in such 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 such Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading.
(d) Use its reasonable best efforts to avoid the issuance of, or, if issued, use its
reasonable best efforts to obtain the withdrawal of (i) any order suspending the effectiveness of
the Registration Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.
(e) Furnish to each Holder, without charge, at least one conformed copy of the Registration
Statement and each amendment thereto and all exhibits to the extent requested by such Person
(including those previously furnished or incorporated by reference) promptly after
the filing of such documents with the Commission; provided, that the Company shall have no
obligation to provide any document or exhibit pursuant to this clause that is available on the
XXXXX system.
(f) Following the effectiveness of the Registration Statement, promptly deliver to each Holder
without charge, as many copies of each Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Persons may reasonably request to
facilitate the disposition of the Registrable Securities owned by them. The Company hereby
consents to the use of such Prospectus and each amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the Registrable Securities covered by
such Prospectus and any amendment or supplement thereto.
(g) Cooperate with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee pursuant to the
Registration Statement, which certificates shall be free, to the extent permitted by the Purchase
Agreement and the Buyer Notes, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any such Holders may
request.
(h) Upon the occurrence of any event contemplated by Section 3(c)(iv), use its reasonable best
efforts to, as promptly as reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the affected Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file
any other required document so that, as thereafter delivered, neither the Registration Statement
nor any Prospectus will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(i) The Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by such Holder and any
Affiliate thereof.
(j) Arrange for the qualification (or exemption from such qualification) of the Registrable
Securities for sale under the securities laws of those jurisdictions within the United States as
any Holder shall reasonably request in writing and shall maintain such qualification (or exemptions
from qualification) in effect during the Effectiveness Period; provided that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where it is not then so
qualified, subject the Company to any material tax in any such jurisdiction where it is not then so
subject or to take any action that would subject it to service of process in suits in any
jurisdiction where it is not then so subject.
(k) Use its reasonable best efforts to cause all such Registrable Securities to be listed on a
securities exchange or any automated quotation system (such as NASDAQ) on which similar securities
issued by the Company are then listed.
(l) Provide a transfer agent and registrar for all Registrable Securities registered pursuant
hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the
effective date of the Registration Statement.
4. Registration Expenses. All fees and expenses incident to the Company’s performance of
or compliance with its obligations under this Agreement (excluding any underwriting discounts and
selling commissions and all legal fees and expenses of legal counsel for any Holder, except for the
reasonable fees and disbursements of one counsel for the selling Holders as provided below in this
Section 4) shall be borne by the Company whether or not any Registrable Securities are sold
pursuant to the Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be made with the
Nasdaq National Market on which the Common Stock is listed for trading, and (B) in compliance with
applicable state securities or Blue Sky laws), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of printing
prospectuses if the printing of prospectuses is reasonably requested by the holders of a majority
of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act
liability insurance, if the Company so desires such insurance, (vi) the reasonable fees and
disbursements of one counsel for the selling Holders, and (vii) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual audit and the fees and
expenses incurred in connection with the listing of the Registrable Securities on any securities
exchange as required hereunder.
5. Indemnification.
(a) Indemnification by the Company. The Company shall indemnify and hold harmless
each Holder, the officers, directors, agents, partners, members, stockholders and employees of each
of them, each Person who controls any such Holder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees
of each such controlling Person, from and against any and all losses, claims, damages, liabilities,
costs (including, without limitation, reasonable costs of preparation and reasonable attorneys’
fees) and expenses (collectively, “Losses”), arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in the Registration Statement, any Prospectus or any
form of prospectus or in any amendment or supplement thereto (it being understood that the Holder
has approved Annex A hereto for this purpose) or in any preliminary prospectus, or arising out of
or relating to any omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made) not misleading,
except to the extent that (1) such untrue statements, alleged untrue statements, omissions or
alleged omissions are based solely upon information regarding such Holder furnished in writing to
the Company by such Holder expressly for use therein, or to the extent that such information
relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities
and was reviewed by such Holder expressly for use in the Registration Statement, such Prospectus or
such form of Prospectus or in any
amendment or supplement thereto (it being understood that the Holder has approved Annex A
hereto for this purpose) or (2) in the case of an occurrence of an event of the type specified in
Section 3(c)(ii)-(iv), the use by such Holder of an outdated or defective Prospectus after the
Company has notified such Holder in writing that the Prospectus is outdated or defective and prior
to the receipt by such Holder of an Advice (as defined in Section 6(b) below) or an amended or
supplemented Prospectus, but only if and to the extent that following the receipt of the Advice or
the amended or supplemented Prospectus the misstatement or omission giving rise to such Loss would
have been corrected. The Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection with the transactions
contemplated by this Agreement.
(b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act), and the directors, officers, agents or employees of such controlling Persons,
from and against all Losses, as incurred, arising solely out of or based solely upon: (x) if the
Company has notified such Holder in writing that the Company is no longer a “Seasoned Issuer” and
the prospectus delivery requirements of the Securities Act apply to sales by such Holder, such
Holder’s failure to comply with the prospectus delivery requirements of the Securities Act or (y)
any untrue statement of a material fact contained in the Registration Statement, any Prospectus, or
any form of prospectus, or in any amendment or supplement thereto, or arising solely out of or
based solely upon any omission of a material fact required to be stated therein or necessary to
make the statements therein (in the case of any Prospectus, or any form of prospectus or supplement
thereto, in light of the circumstances under which they were made) not misleading, but only to the
extent that, (1) such untrue statements or omissions are based solely upon information regarding
such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the
extent that such information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved in writing by such
Holder expressly for use in the Registration Statement (it being understood that the Holder has
approved Annex A hereto for this purpose), such Prospectus or such form of Prospectus or in any
amendment or supplement thereto, or (2) in the case of an occurrence of an event of the type
specified in Section 3(c)(ii)(iv), the use by such Holder of an outdated or defective Prospectus
after the Company has notified such Holder in writing that the Prospectus is outdated or defective
and prior to the receipt by such Holder of advice (the “Advice”) in writing by the Company that the
use of the applicable Prospectus may be resumed, or of an amended or supplemented Prospectus, but
only if and to the extent that following the receipt of the Advice or the amended or supplemented
Prospectus the misstatement or omission giving rise to such Loss would have been corrected;
provided, however, that in no event shall any indemnity of any Holder under this
paragraph (b) exceed the net proceeds from the offering received by such Holder, less any amounts
paid under paragraph (d).
(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or
asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees
and expenses incurred in connection with defense thereof; provided, that the failure of any
Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and
only) to the extent that such failure shall have proximately and materially adversely prejudiced
the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in any such Proceeding
and to participate in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of, and diligently prosecute, such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding following its receipt of the notice
described above in this Section 5(c); or (3) the named parties to any such Proceeding (including
any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist
if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have
the right to assume the defense thereof and such counsel shall be at the expense of the
Indemnifying Party), provided, that the Indemnifying Party shall not be liable for the fees
and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties.
The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected
without its written consent, which consent shall not be unreasonably withheld.
(d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is
unavailable to an Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in
connection with the actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact or omission or
alleged omission of a material fact, has been taken or made by, or relates to information supplied
by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission.
The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent such party would
have been indemnified for such fees or expenses if the indemnification provided for in this Section
was available to such party in accordance with its terms. Notwithstanding the foregoing, in no
event shall the contribution by any Holder under this paragraph (d) exceed the net proceeds from
the offering received by such Holder, less any amounts paid under paragraph (b).
The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 5(d) were determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
6. Miscellaneous
(a) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement.
(b) Discontinued Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any
event of the kind described in Section 3(c), such Holder will forthwith discontinue disposition of
such Registrable Securities under the Registration Statement until such Holder’s receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised
in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed,
and, in either case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or Registration
Statement. The Company may provide appropriate stop orders to enforce the provisions of this
paragraph.
(c) Amendments and Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed by the Company and the Holder or Holders (as applicable) of
no less than two-thirds of the then outstanding Registrable Securities. The Company shall provide
prior notice to all Holders of any proposed waiver or amendment. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any such right.
(d) Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given and effective on
the earliest of (i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section prior to 5:00 p.m. (California time) on
a Business Day, (ii) the Business Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number specified in this
Agreement later than 5:00 p.m. (California time) on any date and earlier than 11:59 p.m.
(California time) on such date, (iii) the Business Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom
such notice is required to be given. The address for such notices and communications shall be as
follows:
| If to the Company: | Avanir Pharmaceuticals | |||
| 00000 Xxxxxxxx Xxxxxx Xx. | ||||
| Xxx Xxxxx, XX 00000 | ||||
| Attention: Xxxxxxx Xxxxxxxxxx | ||||
| Telephone: (000) 000-0000 | ||||
| Fax: (000) 000-0000 |
| With a copy to: | Xxxxxx & Xxxxxxx LLP | |||
| 000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx | ||||
| Xxxxx Xxxx, XX 00000 | ||||
| Attention: Xxxx X. Xxxxxx | ||||
| Telephone: (000) 000-0000 | ||||
| Fax: (000) 000-0000 | ||||
| If to Xxxxxx: | Xxxx X. Xxxxxx | |||
| [Address] | ||||
| With a copy to: | Milbank, Tweed, Xxxxxx & XxXxxx LLP | |||
| 000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx | ||||
| Xxx Xxxxxxx, Xxxxxxxxxx 00000 | ||||
| Attn: Xxxxx Xxxxxxxxx | ||||
| Telephone: (000) 000-0000 | ||||
| Fax: (000) 000-0000 | ||||
| If to any other Person who is then the registered Holder: | To the address of such Holder as it appears in the stock transfer books of the Company |
or such other address as may be designated in writing hereafter, in the same manner, by such
Person.
(e) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and shall inure to the
benefit of each Holder. The Company may not assign its rights or obligations hereunder without the
prior written consent of the Holders of no less than two-thirds of the then outstanding Registrable
Securities, which consent shall not be unreasonably withheld. Each Holder may not assign its
respective rights hereunder without Company’s prior written consent, which consent shall not be
unreasonably withheld.
(f) Minimum Transfer. If a Holder transfers less than 200,000 shares of Registerable
Securities to a Person that is not a Holder prior to the effectiveness of a Registration Statement,
such shares of Common Stock shall no longer be Registerable Securities.
(g) Execution and Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original and, all of which
taken together shall constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with the same force and
effect as if such facsimile signature were the original thereof.
(h) Governing Law. This Agreement (and any claim or controversy arising out of or
relating to this Agreement) shall be governed by the law of the State of California without regard
to conflict of law principles that would result in the application of any law other than the law of
the State of California.
(i) Consent to Jurisdiction. Each party to this Agreement hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive jurisdiction of any
California State court, or Federal court of the United States of America, sitting in California,
and any appellate court from any thereof, in any action or proceeding arising out of or relating to
this Agreement or the agreements delivered in connection herewith or the transactions contemplated
hereby or thereby or for recognition or enforcement of any judgment relating thereto, and each of
the parties hereby irrevocably and unconditionally (A) agrees not to commence any such action or
proceeding except in such courts, (B) agrees that any claim in respect of any such action or
proceeding may be heard and determined in such California State court or, to the extent permitted
by law, in such Federal court, (C) waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of any such action or
proceeding in any such California State or Federal court, and (D) waives, to the fullest extent
permitted by Law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such California State or Federal court. Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by Law. Each party hereto
hereby irrevocably waives personal service of process and consents to process being served in any
such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient service of process and
notice thereof. Nothing in this Agreement will affect the right of any party to this Agreement to
serve process in any other manner permitted by Law.
(j) Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions without including
any of such that may be hereafter declared invalid, illegal, void or unenforceable.
(k) Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.
| AVANIR PHAMACEUTICALS |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: Xxxx X. Xxxxxx | ||||
| Title: President and Chief Executive Officer | ||||
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.
| XXXX X. XXXXXX |
||||
| /s/ Xxxx Xxxxxx | ||||
ANNEX A
PLAN OF DISTRIBUTION
The Selling Stockholders and any of their pledgees, donees, transferees, assignees or other
successors-in-interest may, from time to time, sell, transfer or otherwise dispose of any or all of
their shares of common stock or interests in shares of common stock on any stock exchange, market
or trading facility on which the shares are traded or in private transactions. These dispositions
may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.
The Selling Stockholders may use one or more of the following methods when disposing of the shares
or interests therein:
| • | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; | ||
| • | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; | ||
| • | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; | ||
| • | an exchange distribution in accordance with the rules of the applicable exchange; | ||
| • | privately negotiated transactions; | ||
| • | short sales entered into after the effective date of the registration statement of which this prospectus is a part; | ||
| • | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; | ||
| • | broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; | ||
| • | a combination of any such methods of disposition; and | ||
| • | any other method permitted pursuant to applicable law. |
The Selling Stockholders may also sell shares under Rule 144 under the Securities Act, if
available, rather than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for other broker-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the Selling
Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated. The Selling Stockholders do not expect these
commissions and discounts to exceed what is customary in the types of transactions involved.
The Selling Stockholders may from time to time pledge or grant a security interest in some or
all of the Shares owned by them and, if they default in the performance of their secured
obligations, the pledgees or secured parties may offer and sell shares of common stock from time to
time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 amending the list of selling stockholders to
include the pledgee, transferee or other successors in interest as selling stockholders under this
prospectus.
Upon the Company being notified in writing by a Selling Stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of common stock through a block
trade, special offering, exchange distribution or secondary distribution or a purchase by a broker
or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b)
under the Securities Act, disclosing (i) the name of each such Selling Stockholder and of the
participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such
shares of common stock were sold, (iv) the commissions paid or discounts or concessions allowed to
such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in this prospectus,
and (vi) other facts material to the transaction. In addition, upon the Company being notified in
writing by a Selling Stockholder that a donee or pledge intends to sell more than 500 shares of
common stock, a supplement to this prospectus will be filed if then required in accordance with
applicable securities law.
The Selling Stockholders also may transfer the shares of common stock in other circumstances,
in which case the transferees, pledgees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus.
In connection with the sale of the shares of common stock or interests in shares of common
stock, the Selling Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common stock in the course
of hedging the positions they assume. The Selling Stockholders may also sell shares of common
stock short and deliver these securities to close out their short positions, or loan or pledge the
common stock to broker-dealers that in turn may sell these securities. The Selling Stockholders
may also enter into option or other transactions with broker-dealers or other financial
institutions or the creation of one or more derivative securities that require the delivery to such
broker-dealer or other financial institution of shares offered by this prospectus, which shares
such broker-dealer or other financial institution may resell pursuant to this prospectus (as
supplemented or amended to reflect such transaction).
The Selling Stockholders and any broker-dealers or agents that are involved in selling the
shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act.
2
The Company has advised the Selling Stockholders that they are required to comply with
Regulation M promulgated under the Securities and Exchange Act during such time as they may be
engaged in a distribution of the shares. The foregoing may affect the marketability of the common
stock.
The Company is required to pay all fees and expenses incident to the registration of the
shares. The Company has agreed to indemnify the Selling Stockholders against certain losses,
claims, damages and liabilities, including liabilities under the Securities Act or otherwise.
The Company has agreed with the Selling Stockholders to keep the registration statement of
which this prospectus constitutes a part effective until the earlier of (a) such time as all of the
shares covered by this prospectus have been disposed of pursuant to and in accordance with the
registration statement or (b) the date on which the shares may be sold without any volume
limitations pursuant to Rule 144(k) of the Securities Act.
3
