ex103.htm


    Exhibit 10.3

    
 

    AMENDMENT
NO. 2 TO SECURITIES PURCHASE AGREEMENT

     

    This
AMENDMENT NO. 2 TO SECURITIES
PURCHASE AGREEMENT (this "Amendment"), is being entered
into and effective as of March 30, 2009, by and among AEOLUS
PHARMACEUTICALS, INC., a Delaware corporation with its headquarters located at
26361 Crown Valley Parkway, Suite 150, Mission Viejo,
California  92691, as issuer (the "Company"), and XMARK
OPPORTUNITY FUND, L.P. and XMARK OPPORTUNITY FUND, LTD. (collectively, the
"Investors"), as Buyers
(as defined in the Agreement (as defined below)) and holders of all the
outstanding 7% Senior Convertible Notes due 2011 of the Company and warrants to
purchase common stock of the Company issued on the Initial Closing Date (as
defined in the Agreement).

     

    WHEREAS, the parties to this
Amendment entered into that certain Securities Purchase Agreement, dated as of
August 1, 2008, as amended by that certain Amendment No. 1 to Securities
Purchase Agreement, dated as of August 4, 2008 (the "Agreement"); and

     

    WHEREAS, the Company and the
Investors wish to further amend the Agreement in order to extend the Election
Termination Date (as defined in Section 1(c)(i) of the
Agreement).

     

    NOW, THEREFORE, the Company and each
Investor agree that the Agreement is hereby amended as follows:

     

    1. DEFINED
TERMS.  Capitalized terms used in this Amendment but not
defined herein shall have the meanings assigned such terms in the
Agreement.

     

    2. ELECTION TO PURCHASE
ADDITIONAL UNITS.  Section 1(c)(i), "Election to Purchase
Additional Units," of the Agreement is hereby amended by replacing “the eighteen
(18) month anniversary of the Initial Closing Date” as it appears in the first
sentence of such section with "December 31, 2013".

     

    3. INVESTOR’S REPRESENTATIONS
AND WARRANTIES.  Each Investor, severally and not jointly,
represents and warrants to the Company that:

     

    (a) Holder of Notes and Warrants
Issued at Initial Closing.  Such Investor is the holder of (A)
all of the Notes and Warrants issued to it at the Initial Closing and (B) all
such Notes and Warrants issued to XMARK JV INVESTMENT PARTNERS, LLC at the
Initial Closing and previously transferred to such Investor in accordance with
the terms thereof, in each case none of which Notes or Warrants have been
converted or exercised, respectively, as of the date hereof, and none of such
Investor’s (i) right, title or interest in such Notes and Warrants or the
Conversion Shares and Warrant Shares, as the case may be, underlying such Notes
and Warrants, or (ii) rights under the Agreement, have been transferred or
assigned to any other Person as of the date hereof.

     

    (b) Validity;
Enforcement.  The execution, delivery and performance by such
Investors of this Amendment have been duly and validly authorized, executed and
delivered on behalf of such Investor and shall constitute the legal, valid and
binding obligations of such Investor enforceable against such Investor in
accordance with their respective terms, except (i) as 

    
       

      
        
          
          

        

        
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      may be limited by general principles of equity or to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights generally, (ii) as limited by laws relating to specific
performance, injunctive relief of other equitable remedies, and (iii) to the
extent the indemnification provisions contained in the Agreement, as amended by
this Amendment, may be limited by applicable laws.

    

     

    (c) No
Conflicts.  The execution, delivery and performance by such
Investor of this Amendment and the consummation by such Investor of the
transactions contemplated hereby will not (i) result in a violation of the
organizational documents of such Investor or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
such Investor is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment  or decree (including federal and state
securities laws) applicable to such Investor, except in the case of clauses (ii)
and (iii) above, for such conflicts, defaults, rights or violations which would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Investor to perform its obligations
hereunder.

     

    4. REPRESENTATIONS AND
WARRANTIES OF THE COMPANY.  The Company represents and warrants
to each of the Investors that:

     

    (a) Authorization; Enforcement;
Validity.  The Company has the requisite corporate power and
authority to enter into, deliver and perform its obligations under this
Amendment.  The execution and delivery of this Amendment and the
consummation by the Company of the transactions contemplated hereby, have been
duly authorized by the Company’s board of directors, and no further filing,
consent, or authorization is required by the Company, its board of directors or
its stockholders.  This Amendment has been duly executed and delivered
by the Company and constitutes the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, except (i) as may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights generally, (ii) as limited by laws relating to specific
performance, injunctive relief of other equitable remedies, and (iii) to
the  extent the indemnification provisions contained in the Agreement,
as amended by this Amendment, may be limited by applicable laws.

     

    (b) No
Conflicts.  The execution, delivery and performance of this
Amendment and the consummation by the Company of the transactions contemplated
hereby will not (i) result in a violation of any certificate of incorporation,
certificate of formation, any certificate of designations or other constituent
documents of the Company or any of its Subsidiaries, any capital stock of the
Company or any of its Subsidiaries or bylaws of the Company or any of its
Subsidiaries or (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) in any respect
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including foreign, federal


    
       

      
        
          
          

        

        
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      and state securities laws and regulations and the rules and
regulations of the OTC Bulletin Board) applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected, except in the case of clauses (ii) and (iii)
above, to the extent that such violation conflict, default or right would not
reasonably be expected to have a Material Adverse Effect.

    

     

    5. MISCELLANEOUS.

     

    (a) Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Amendment shall be governed by the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.

     

    (b) Counterparts.  This
Amendment may be executed in two or more identical counterparts, all of which
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;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile signature.

     

    (c) Headings.  The
headings of this Amendment are for convenience of reference and shall not form
part of, or affect the interpretation of, this Amendment.

     

    (d) Severability.  If
any provision of this Amendment shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Amendment in that jurisdiction or the
validity or enforceability of any provision of this Amendment in any other
jurisdiction.

     

    (e) Amendments.  This
Amendment may only be amended in accordance with the terms and conditions of
Section 9(e) of the Agreement.

     

    (f) Successors and
Assigns.  This Amendment shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, including
any purchasers of the Notes or the Warrants.

     

    (g) No Third Party
Beneficiaries.  This Amendment is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

     

    [Signature Pages
Follow.]

     


    
      
        
           

        

         


      

      
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    IN WITNESS WHEREOF, each
Investor and the Company have caused their respective signature page to this
Amendment No. 2 to Securities Purchase Agreement to be duly executed as of the
date first written above.

     

    
      	
               
      

            	
              COMPANY:

            


    

     

    
      	
               
      

            	
              AEOLUS
      PHARMACEUTICALS, INC.

            


    

     

    
      	
               
      

            	
              By:

            	 	
              /s/ Michael P.
      McManus

            	 


    

    
      	
               
      

            	
              Name:

            	
              Michael
      P. McManus

            


    

    
      	
               
      

            	
              Title:

            	
              Chief
      Financial Officer

            


    

     


    
      
        
          Signature
Page to Amendment No. 2 to Securities Purchase Agreement

        

         


      

      
         


        
          

        

      

      
         


      

    


    IN WITNESS WHEREOF, each
Investor and the Company have caused their respective signature page to this
Amendment No. 2 to Securities Purchase Agreement to be duly executed as of the
date first written above.

     

    INVESTORS:

     

    
      	
               
      

            	
              XMARK
      OPPORTUNITY FUND, L.P.

            


    

    
      	
              By:

            	
              XMARK
      OPPORTUNITY GP, LLC, its General
Partner

            


    

    
      	
              By:

            	
              XMARK
      OPPORTUNITY PARTNERS, LLC, its Sole
Member

            


    

    
      	
              By:

            	
              XMARK
      CAPITAL PARTNERS, LLC, its Managing
Member

            


    

     

    
      	
              By:

            	
              /s/ Mitchell D.
      Kaye

            	 	 


    

    
      	
              Name:

            	
              Mitchell
      D. Kaye

            


    

    
      	
              Title:

            	
              Co-Managing
      Member

            


    

     

    
      	
               
      

            	
              XMARK
      OPPORTUNITY FUND, LTD.

            


    

    
      	
              By:

            	
              XMARK
      OPPORTUNITY MANAGER, LLC, its Investment
Manager

            


    

    
      	
              By:

            	
              XMARK
      OPPORTUNITY PARTNERS, LLC, its Sole
Member

            


    

    
      	
              By:

            	
              XMARK
      CAPITAL PARTNERS, LLC, its Managing
Member

            


    

     

    
      	
              By:

            	
              /s/ Mitchell D.
      Kaye

            	 	 


    

    
      	
              Name:

            	
              Mitchell
      D. Kaye

            


    

    
      	
              Title:

            	
              Co-Managing
      Member

            


    

     

    
      Signature
Page to Amendment No. 2 to Securities Purchase
Agreement