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Exhibit 10.2
 
AEOLUS PHARAMACEUTICALS, INC.
REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (the “Agreement”) is made and entered into as
of            , 2012 by and among Aeolus Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and the “Purchasers” named in that certain
Securities Purchase Agreement by and among the Company and the Purchasers, dated
as of an even date herewith (the “Purchase Agreement”).  Capitalized terms used
in this Agreement without definition have the respective meanings ascribed
thereto in the Purchase Agreement.
 
The parties hereby agree as follows:
 
1. Certain Definitions.
 
As used in this Agreement, the following terms shall have the following
meanings:
 
“Purchasers” means the Purchasers identified in the Purchase Agreement and any
Affiliate or permitted transferee of any Purchaser who is a subsequent holder of
any Registrable Securities.
 
“Prospectus” means the prospectus included in any Registration Statement, 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 such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus.
 
“Register,” “registered” and “registration” refer to a registration made by
preparing and filing a Registration Statement or similar document in compliance
with the Securities Act (as defined below), and the declaration or ordering of
effectiveness of such Registration Statement or document.
 
“Registrable Securities” means (i) the Common Shares, (ii) the Warrant Shares
and (iii) any other securities issued or issuable with respect to or in exchange
for Registrable Securities, whether by merger, charter amendment or otherwise;
provided, that a security shall cease to be a Registrable Security upon (A) sale
pursuant to a Registration Statement or Rule 144 under the 1933 Act, or (B) such
security becoming eligible for sale without restriction by the Purchasers
pursuant to Rule 144.
 
“Registration Statement” means any registration statement of the Company filed
under the Securities Act that covers the resale of any of the Registrable
Securities pursuant to the provisions of this Agreement, amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.
 
“Required Purchasers” means the Purchasers holding a majority of the outstanding
Registrable Securities.
 
2. Registration.
 
(a) Registration Statements.  Promptly following the closing of the purchase and
sale of the securities contemplated by the Purchase Agreement (the “Closing
Date”) but no later than forty-five (45) days after the Closing Date (the
“Filing Deadline”), the Company shall prepare and file with the Commission a
Registration Statement on Form S-1, covering the resale of the Registrable
Securities.  Subject to any Commission comments, such Registration Statement
shall include the plan of distribution attached hereto as Exhibit A; provided,
however, that no Purchaser shall be named as an “underwriter” in the
Registration Statement without the Purchaser’s prior written consent.  Such
Registration Statement also shall cover, to the extent allowable under the
Securities Act and the rules 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.  The Registration Statement (and each amendment or supplement
thereto, and each request for acceleration of effectiveness thereof) shall be
provided in accordance with Section 3(c) to the Purchasers prior to its filing
or other submission.  If a Registration Statement covering the Registrable
Securities is not filed with the Commission on or prior to the Filing Deadline,
the Company will make pro rata payments to each Purchaser, as liquidated damages
and not as a penalty, in an amount equal to 0.5% of the aggregate amount
invested by such Purchaser for each 30-day period or pro rata for any portion
thereof following the Filing Deadline for which no Registration Statement is
filed with respect to the Registrable Securities. The filing of the Registration
Statement shall terminate the existence of any event giving rise to the payment
of liquidated damages pursuant to the foregoing sentence.  Such payments shall
constitute the Purchasers’ exclusive monetary remedy for such events, but shall
not affect the right of the Purchasers to seek injunctive relief.  Such payments
shall be made to each Purchaser in cash no later than ten (10) days after the
end of each 30-day period.  Notwithstanding anything else to the contrary
contained herein, liquidated damages, if any, payable pursuant to this Section
2(a) shall cease to accrue after the date that is six (6) months after the
Closing Date.
 
 
 
 

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(b) Expenses.  The Company will pay all expenses associated with each
registration, including filing and printing fees, the Company’s counsel and
accounting fees and expenses, costs associated with clearing the Registrable
Securities for sale under applicable state securities laws, and listing fees. In
no event shall the Company be responsible for any discounts, commissions, fees
of underwriters, selling brokers, dealer managers or similar securities industry
professionals with respect to the Registrable Securities being sold, or any
legal fees or other costs of the holders.
 
(c) Effectiveness.
 
(i) The Company shall use commercially reasonable efforts to have the
Registration Statement declared effective within one hundred twenty (120) days
of the date hereof (one hundred eighty (180) days in the event the Commission
shall provide any comments to the Registration Statement) (the “Effectiveness
Deadline”).  The Company shall notify the Purchasers by facsimile or e-mail as
promptly as practicable, and in any event, within two (2) Trading Days, after
any Registration Statement is declared effective and, if requested, shall
provide the Purchasers with copies of any related Prospectus to be used in
connection with the sale or other disposition of the securities covered
thereby.  If (A) a Registration Statement covering the Registrable Securities is
not declared effective by the Commission prior to the earlier of (i) five (5)
Trading Days after the Commission shall have informed the Company that no review
of the Registration Statement will be made or that the Commission has no further
comments on the Registration Statement or (ii) the Effectiveness Deadline date,
or (B) after a Registration Statement has been declared effective by the
Commission, sales cannot be made pursuant to such Registration Statement for any
reason (including without limitation by reason of a stop order, or the Companys
failure to update the Registration Statement), but excluding any Allowed Delay
(as defined below), then the Company will make pro rata payments to each
Purchaser, as liquidated damages and not as a penalty, in an amount equal to
0.5% of the aggregate amount invested by such Purchaser for each 30-day period
or pro rata for any portion thereof following the date by which such
Registration Statement should have been effective (the “Blackout Period”).  Such
payments shall constitute the Purchasers’ exclusive monetary remedy for such
events, but shall not affect the right of the Purchasers to seek injunctive
relief.  The amounts payable as liquidated damages pursuant to this paragraph
shall be paid monthly within ten (10) days of the last day of each month
following the commencement of the Blackout Period until the termination of the
Blackout Period. The Blackout Period shall expire upon the declaration of
effectiveness by the Commission of the Registration Statement (if the Blackout
Period is covered by clause (A) of this Section 2(c)(i)) or the date on which
sales pursuant to the Registration Statement may resume (if the Blackout Period
is covered by clause (B) of this Section 2(c)(i)). Such payments shall be made
to each Purchaser in cash no later than ten (10) days after the end of each
30-day period.  Notwithstanding anything else to the contrary contained herein,
liquidated damages, if any, payable pursuant to this Section 2(c) shall cease to
accrue after the date that is six (6) months after the Closing Date.
 
 
 
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(ii) For not more than twenty (20) consecutive days or for a total of not more
than forty-five (45) days in any twelve (12) month period, the Company may
suspend the use of any Prospectus included in any Registration Statement
contemplated by this Section 2 in the event that the Company determines in good
faith that such suspension is necessary to (A) delay the disclosure of material
non-public information concerning the Company, the disclosure of which at the
time is not, in the good faith opinion of the Company, in the best interests of
the Company or (B) amend or supplement the affected Registration Statement or
the related Prospectus so that such Registration Statement or Prospectus shall
not include 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 the case of the Prospectus in light of the circumstances under which they
were made, not misleading, or (C) to file a post-effective amendment to such
Registration Statement to comply with the undertakings required by Item 512(a)
of Regulation S-K (an “Allowed Delay”); provided, that the Company shall
promptly (a) notify each Purchaser in writing of the commencement of and the
reasons for an Allowed Delay, but shall not (without the prior written consent
of a Purchaser) disclose to such Purchaser any material non-public information
giving rise to an Allowed Delay, (b) advise the Purchasers in writing to cease
all sales under the Registration Statement until the end of the Allowed Delay
and (c) use commercially reasonable efforts to terminate an Allowed Delay as
promptly as practicable.
 
(d) Rule 415; Cutback  If at any time the Commission takes the position that the
offering of some or all of the Registrable Securities in a Registration
Statement is not eligible to be made on a delayed or continuous basis under the
provisions of Rule 415 under the Securities Act or requires any Purchaser to be
named as an “underwriter”, the Company shall (i) remove from the Registration
Statement such portion of the Registrable Securities (the “Cut Back Shares”)
and/or (ii) agree to such restrictions and limitations on the registration and
resale of the Registrable Securities as the Commission may require to assure the
Company’s compliance with the requirements of Rule 415 (collectively, the
“Commission Restrictions”); provided, however, that the Company shall not agree
to name any Purchaser as an “underwriter” in such Registration Statement without
the prior written consent of such Purchaser.  Any cut-back imposed on the
Purchasers pursuant to this Section 2(d) shall be allocated among the Purchasers
on a pro rata basis.  No liquidated damages shall accrue as to any Cut Back
Shares until such date as the Company is able to effect the registration of such
Cut Back Shares in accordance with any Commission Restrictions (such date, the
“Restriction Termination Date”).  From and after the Restriction Termination
Date applicable to any Cut Back Shares, all of the provisions of this Section 2
(including the liquidated damages provisions) shall again be applicable to such
Cut Back Shares; provided, however, that (i) the Filing Deadline for the
Registration Statement including such Cut Back Shares shall be forty-five (45)
days after such Restriction Termination Date, and (ii) the date by which the
Company is required to obtain effectiveness with respect to such Cut Back Shares
under Section 2(c) shall be the 90th day immediately after the filing date of
the Registration Statement filed with respect to such Cut Back Shares.
 
 
 
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3. Company Obligations.  The Company will use commercially reasonable efforts to
effect the registration of the Registrable Securities in accordance with the
terms hereof, and pursuant thereto the Company will:
 
(a) use commercially reasonable efforts to cause such Registration Statement to
become effective and to remain continuously effective for a period that will
terminate upon the earlier of (i) the date on which all Registrable Securities
covered by such Registration Statement as amended from time to time, have been
sold, and (ii) the date on which all Registrable Securities covered by such
Registration Statement may be sold without volume restrictions pursuant to Rule
144 (the “Effectiveness Period”);
 
(b) prepare and file with the Commission such amendments and post-effective
amendments to the Registration Statement and the Prospectus as may be necessary
to keep the Registration Statement effective for the Effectiveness Period and to
comply with the provisions of the Securities Act and the Exchange Act with
respect to the distribution of all of the Registrable Securities covered
thereby;
 
(c) furnish to the holders of Registrable Securities (i) promptly after the same
is prepared and publicly distributed, filed with the Commission, or received by
the Company (but not later than two (2) Trading Days after the filing date,
receipt date or sending date, as the case may be) one (1) copy of any
Registration Statement and any amendment thereto, each preliminary prospectus
and Prospectus and each amendment or supplement thereto, and each letter written
by or on behalf of the Company to the Commission or the staff of the Commission,
and each item of correspondence from the Commission or the staff of the
Commission, in each case relating to such Registration Statement (other than any
portion of any thereof which contains information for which the Company has
sought confidential treatment), and (ii) such number of copies of a Prospectus,
including a preliminary prospectus, and all amendments and supplements thereto
and such other documents as each Purchaser may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such Purchaser
that are covered by the related Registration Statement;
 
 
 
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(d) use commercially reasonable efforts to (i) prevent the issuance of any stop
order or other suspension of effectiveness and, (ii) if such order is issued,
obtain the withdrawal of any such order at the earliest possible moment;
 
(e) prior to any public offering of Registrable Securities, use commercially
reasonable efforts to register or qualify or cooperate with the Purchasers and
their counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions requested by the Purchasers and do any and all other
commercially reasonable acts or things necessary or advisable to enable the
distribution in such jurisdictions of the Registrable Securities covered by the
Registration Statement; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (i) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(e), (ii) subject itself to general taxation in any
jurisdiction where it would not otherwise be so subject but for this Section
3(e), or (iii) file a general consent to service of process in any such
jurisdiction;
 
(f) use commercially reasonable efforts to cause all Registrable Securities
covered by a Registration Statement to be listed on each securities exchange,
interdealer quotation system or other market on which similar securities issued
by the Company are then listed;
 
(g) immediately notify the Purchasers, at any time prior to the end of the
Effectiveness Period, upon discovery that, or upon the happening of any event as
a result of which, the Prospectus includes an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and promptly prepare, file with the Commission and
furnish to such holder a supplement to or an amendment of such Prospectus as may
be necessary so that such Prospectus shall not include 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 not misleading in light of the
circumstances then existing; and
 
(h) otherwise use commercially reasonable efforts to comply with all applicable
rules and regulations of the Commission under the Securities Act and the
Exchange Act, including, without limitation, Rule 172 under the Securities Act,
file any final Prospectus, including any supplement or amendment thereof, with
the Commission pursuant to Rule 424 under the Securities Act, promptly inform
the Purchasers in writing if, at any time during the Effectiveness Period, the
Company does not satisfy the conditions specified in Rule 172 and, as a result
thereof, the Purchasers are required to deliver a Prospectus in connection with
any disposition of Registrable Securities and take such other actions as may be
reasonably necessary to facilitate the registration of the Registrable
Securities hereunder; and make available to its security holders, as soon as
reasonably practicable, but not later than the Availability Date (as defined
below), an earnings statement covering a period of at least twelve (12) months,
beginning after the effective date of each Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act, including Rule 158 promulgated thereunder (for the purpose of
this subsection 3(i), “Availability Date” means the 45th day following the end
of the fourth fiscal quarter that includes the effective date of such
Registration Statement, except that, if such fourth fiscal quarter is the last
quarter of the Company’s fiscal year, “Availability Date” means the 90th day
after the end of such fourth fiscal quarter).
 
 
 
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(i) with a view to making available to the holders of Registrable Securities the
benefits of Rule 144 (or its successor rule) and any other rule or regulation of
the Commission that may at any time permit the Purchasers to sell shares of
Common Stock to the public without registration, the Company covenants and
agrees to use commercially reasonable efforts to:  (i) make and keep public
information available, as those terms are understood and defined in Rule 144,
until the earlier of (A) six months after such date as all of the Registrable
Securities may be sold without restriction by the holders thereof pursuant to
Rule 144 or any other rule of similar effect or (B) such date as all of the
Registrable Securities shall have been resold; and (ii) file with the Commission
in a timely manner (including any applicable extension periods) all reports and
other documents required of the Company under the Exchange Act.
 
4. Obligations of the Purchasers.
 
(a) Each Purchaser shall furnish in writing 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 five (5) Trading Days prior to the first
anticipated filing date of any Registration Statement, the Company shall notify
each Purchaser of the information the Company requires from such Purchaser if
such Purchaser elects to have any of the Registrable Securities included in the
Registration Statement.  A Purchaser shall provide such information to the
Company at least two (2) Trading Days prior to the first anticipated filing date
of such Registration Statement if such Purchaser elects to have any of the
Registrable Securities included in the Registration Statement. The Company shall
not be required to include the Registrable Securities of a holder thereof in a
Registration Statement and shall not be required to pay any liquidated or other
damages under Sections 2(a) or 2(c) hereof to such holder or other Person who
fails to furnish to the Company a fully completed selling stockholder
questionnaire at least two Trading Days prior to the Filing Date.
 
(b) Each Purchaser, by its acceptance of the Registrable Securities agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of a Registration Statement hereunder, unless
such Purchaser has notified the Company in writing of its election to exclude
all of its Registrable Securities from such Registration Statement.
 
(c) Each Purchaser agrees that, upon receipt of any notice from the Company of
either (i) the commencement of an Allowed Delay pursuant to Section 2(c)(ii), or
(ii) the happening of an event pursuant to Section 3(h) hereof, such Purchaser
will immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities, until the
Purchaser is advised by the Company that such dispositions may again be made.
 
5. Indemnification.
 
 
 
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(a) Indemnification by the Company.  The Company will indemnify and hold
harmless each Purchaser and its officers, directors, members, employees and
agents, successors and assigns, and each other person, if any, who controls such
Purchaser within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement or omission or alleged omission
of any material fact contained in any Registration Statement, any preliminary
Prospectus or final Prospectus, or any amendment or supplement thereof; (ii) any
blue sky application or other document executed by the Company specifically for
that purpose or based upon written information furnished by the Company filed in
any state or other jurisdiction in order to qualify any or all of the
Registrable Securities under the securities laws thereof (any such application,
document or information herein called a “Blue Sky Application”); (iii) the
omission or alleged omission to state in a Blue Sky Application a material fact
required to be stated therein or necessary to make the statements therein not
misleading; (iv) any violation by the Company or its agents of any rule or
regulation promulgated under the Securities Act applicable to the Company or its
agents and relating to action or inaction required of the Company in connection
with such registration; or (v) any failure to register or qualify the
Registrable Securities included in any such Registration Statement in any state
where the Company or its agents has affirmatively undertaken or agreed in
writing that the Company will undertake such registration or qualification on a
Purchaser’s behalf and will reimburse such Purchaser, and each such officer,
director or member and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon (i) a
Purchaser’s failure to comply with the prospectus delivery requirements of the
Securities Act, (ii) the use by a Purchaser of an outdated or defective
Prospectus after the Company has notified such Purchase in writing that the
Prospectus is outdated or defective, or (iii) an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity with
information furnished by such Purchaser or any such controlling person in
writing specifically for use in such Registration Statement or Prospectus or
Blue Sky Application.
 
(b) Indemnification by the Purchasers.  Each Purchaser agrees, severally but not
jointly, to indemnify and hold harmless, to the fullest extent permitted by law,
the Company, its directors, officers, employees, stockholders and each person
who controls the Company (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expense (including reasonable attorney
fees) resulting from (i) such Purchaser’s failure to comply with the prospectus
delivery requirements of the Securities Act; (ii) the use by such Purchaser of
an outdated or defective Prospectus after the Company has notified such Purchase
in writing that the Prospectus is outdated or defective; or (iii) any untrue
statement of a material fact or any omission of a material fact required to be
stated in the Registration Statement or Prospectus or preliminary Prospectus or
amendment or supplement thereto or in any Blue Sky Application or necessary to
make the statements therein not misleading, (A) to the extent, but only to the
extent that (1) such untrue statement or omission is contained in any
information furnished in writing by such Purchaser to the Company specifically
for inclusion in such Registration Statement or Prospectus or amendment or
supplement thereto or Blue Sky Application or (2)such information relates to
such Purchaser or such Purchaser’s proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by
such Purchaser expressly for use in a Registration Statement (it being
understood that the Purchaser has approved Annex A hereto for this purpose),
such Prospectus or such form of Prospectus or in any amendment or supplement
thereto.  In no event shall the liability of a Purchaser be greater in amount
than the dollar amount of the proceeds (net of all expense paid by such
Purchaser in connection with any claim relating to this Section 5 and the amount
of any damages such Purchaser has otherwise been required to pay by reason of
such untrue statement or omission) received by such Purchaser upon the sale of
the Registrable Securities included in the Registration Statement giving rise to
such indemnification obligation, except in the case of fraud or willful
misconduct by such Purchaser.
 
 
 
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(c) Conduct of Indemnification Proceedings.  Any person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such person unless (a) the indemnifying party
has agreed to pay such fees or expenses, or (b) the indemnifying party shall
have failed to assume the defense of such claim and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of any such
person, based upon written advice of its counsel, a conflict of interest exists
between such person and the indemnifying party with respect to such claims (in
which case, if the person notifies the indemnifying party in writing that such
person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such person); and provided, further, that the failure of
any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations hereunder, except to the extent that such
failure to give notice shall materially adversely affect the indemnifying party
in the defense of any such claim or litigation.  It is understood that the
indemnifying party shall not, in connection with any proceeding in the same
jurisdiction, be liable for fees or expenses of more than one separate firm of
attorneys at any time for all such indemnified parties.  No indemnifying party
will, except with the consent of the indemnified party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such claim or litigation.
 
Subject to the terms of this Agreement, all reasonable fees and expenses of an
indemnified party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such proceeding in a
manner not inconsistent with this Section 5) shall be paid to the indemnified
party, as incurred; provided, that the indemnified party shall promptly
reimburse the indemnifying party for that portion of such fees and expenses
applicable to such actions for which it is finally judicially determined (not
subject to appeal) such indemnified party is not entitled to indemnification
hereunder.
 
(d) Contribution.  If for any reason the indemnification provided for in the
preceding paragraphs (a) and (b) is unavailable to an indemnified party or
insufficient to hold it harmless, other than as expressly specified therein,
then the indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect the relative fault of the
indemnified party and the indemnifying party, as well as any other relevant
equitable considerations.  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 not guilty of such fraudulent
misrepresentation.  In no event shall the contribution obligation of a holder of
Registrable Securities be greater in amount than the dollar amount of the
proceeds (net of all expenses paid by such holder in connection with any claim
relating to this Section 5 and the amount of any damages such holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by it upon the sale of the
Registrable Securities giving rise to such contribution obligation except in the
case of fraud or willful misconduct by such holder.
 
 
 
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6. Miscellaneous.
 
(a) Amendments and Waivers.  This Agreement may be amended only by a writing
signed by the Company and the Required Purchasers.  The Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company shall have obtained the written consent to
such amendment, action or omission to act, of the Required Purchasers.
 
(b) Notices.  All notices and other communications provided for or permitted
hereunder shall be made as set forth in Section 5.4 of the Purchase Agreement.
 
(c) Assignments and Transfers by Purchasers.  The provisions of this Agreement
shall be binding upon and inure to the benefit of the Purchasers and their
respective successors and assigns.  A Purchaser may transfer or assign, in whole
or from time to time in part, to one or more persons its rights hereunder in
connection with the transfer of Registrable Securities by such Purchaser to such
person, provided that such Purchaser complies with all laws applicable thereto
and provides written notice of assignment to the Company promptly after such
assignment is effected.
 
(d) Assignments and Transfers by the Company.  This Agreement may not be
assigned by the Company (whether by operation of law or otherwise) without the
prior written consent of the Required Purchasers, provided, however, that in the
event that the Company is a party to a merger, consolidation, share exchange or
similar business combination transaction in which the Common Stock is converted
into the equity securities of another Person, from and after the effective time
of such transaction, such Person shall, by virtue of such transaction, be deemed
to have assumed the obligations of the Company hereunder, the term “Company”
shall be deemed to refer to such Person and the term “Registrable Securities”
shall be deemed to include the securities received by the Purchasers in
connection with such transaction unless such securities are otherwise freely
tradable by the Purchasers after giving effect to such transaction.
 
(e) Benefits of the Agreement.  The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective permitted successors
and assigns of the parties.  Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
 
 
 
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(f) Execution.  This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.
 
(g) Headings.  The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.
 
(h) Severability.  If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
 
(i) Further Assurances.  The parties shall execute and deliver all such further
instruments and documents and take all such other actions as may reasonably be
required to carry out the transactions contemplated hereby and to evidence the
fulfillment of the agreements herein contained.
 
(j) Entire Agreement.  This Agreement, together with the Purchase Agreement and
the exhibits and schedules hereto and thereto, contain the entire understanding
of the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules.
 
(k) Governing Law; Consent to Jurisdiction.  All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement (whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New
York, Borough of Manhattan. Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the City of
New York, borough of Manhattan for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is improper
or is an inconvenient venue for such proceeding.  Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or 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 contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by law.  If either party shall
commence an action or proceeding to enforce any provisions of this Agreement,
then the prevailing party in such action or proceeding shall be reimbursed by
the other party for its reasonable attorneys’ fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such action or
proceeding.
 
 
 
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(l) WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.
 
(m) 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 Trading Day, then such action may be taken or such right may be
exercised on the next succeeding Trading Day.
 
 
 
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IN WITNESS WHEREOF, the undersigned has caused this Registration Rights
Agreement to be duly executed by its authorized signatory as of the date first
indicated above.
 

AEOLUS PHARAMACEUTICALS, INC.
 
 
Address for Notice:
26361 Crown Valley Parkway,
Suite 150
Mission Viejo, California 92691
Attn:  President
By:  /s/ John McManus                                          
     John McManus
     President and Chief Executive Officer
 
With a copy to (which shall not constitute notice):
 
 
K&L Gates LLP
1900 Main Street
Suite 600
Irvine, CA 92614
Attn: Michael A. Hedge, Esq.
Fax: (949) 623-4454
 
 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
 
 
 
 
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IN WITNESS WHEREOF, the undersigned has caused this Registration Rights
Agreement to be duly executed by its authorized signatories as of the date first
indicated above.
 
Name of Purchaser: ________________________________________________________
 
Signature of Authorized Signatory of Purchaser:
_________________________________
 
Name of Authorized Signatory: _______________________________________________
 
Title of Authorized Signatory: ________________________________________________
 
Email Address of Authorized Signatory:_________________________________________
 
Facsimile Number of Authorized Signatory:
__________________________________________
 
Address for Notices to Purchaser:
_______________________________________________
     _______________________________________________
     _______________________________________________
     _______________________________________________
 
 

 
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Exhibit A

Plan of Distribution

The selling stockholders, which as used herein includes donees, pledgees,
transferees or other successors-in-interest selling shares of common stock or
interests in shares of common stock received after the date of this prospectus
from a selling stockholder as a gift, pledge, partnership distribution or other
transfer, 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 any one or more of the following methods when
disposing of 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 effected after the date the registration statement of which this
Prospectus is a part is declared effective by the Commission;
 
- 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 sale; and
 
- any other method permitted by applicable law.
 
The selling stockholders may, from time to time, pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock, from time to time, under
this prospectus, or under an amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.  The selling stockholders 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 our common stock or interests therein, 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 our 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 which 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).
 
 
 
 

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The aggregate proceeds to the selling stockholders from the sale of the common
stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any.  Each of the selling stockholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole or in part, any proposed purchase of common stock to be made directly or
through agents.  We will not receive any of the proceeds from this offering.
Upon any exercise of the warrants by payment of cash, however, we will receive
the exercise price of the warrants.
 
The selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided that they meet the criteria and conform to the requirements of that
rule.
 
The selling stockholders and any underwriters, broker-dealers or agents that
participate in the sale of the common stock or interests therein may be
"underwriters" within the meaning of Section 2(11) of the Securities Act.  Any
discounts, commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the Securities
Act.  Selling stockholders who are "underwriters" within the meaning of Section
2(11) of the Securities Act will be subject to the prospectus delivery
requirements of the Securities Act.
 
Each selling stockholder has advised us that they have not entered into any
written or oral agreements, understandings or arrangements with any underwriter
or broker-dealer regarding the sale of the resale shares. There is no
underwriter or coordinating broker acting in connection with the proposed sale
of the resale shares by the selling stockholders.
 
To the extent required, the shares of our common stock to be sold, the names of
the selling stockholders, the respective purchase prices and public offering
prices, the names of any agents, dealer or underwriter, any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.
 
In order to comply with the securities laws of some states, if applicable, the
common stock may be sold in these jurisdictions only through registered or
licensed brokers or dealers.  In addition, in some states the common stock may
not be sold unless it has been registered or qualified for sale or an exemption
from registration or qualification requirements is available and is complied
with.
 
We have advised the selling stockholders that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of shares in the market
and to the activities of the selling stockholders and their affiliates.  In
addition, to the extent applicable we will make copies of this prospectus (as it
may be supplemented or amended from time to time) available to the selling
stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act.  The selling stockholders may indemnify any broker-dealer
that participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities Act.
 
 
 
 

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We have agreed to indemnify the selling stockholders against certain
liabilities, including liabilities under the Securities Act and state securities
laws, relating to the registration of the shares offered by this prospectus.
 
We have agreed with the selling stockholders to keep the registration statement
of which this prospectus constitutes a part effective until the earlier of (1)
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 (2) the date on
which the shares may be sold without volume restrictions pursuant to Rule 144 of
the Securities Act.
 

 
 
 
 
 
 
 
 
 
 

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