exv10w1






Exhibit 10.1




AVANIR PHARMACEUTICALS, INC.

INDEMNIFICATION AGREEMENT




     This Indemnification Agreement (“Agreement”) is made effective as of March 25, 2009
(the “Effective Date”) by and between Avanir Pharmaceuticals, Inc., a Delaware corporation
(the “Company”), and
_______________ (“Indemnitee”).



RECITALS




     WHEREAS, the Company’s predecessor, Avanir Pharmaceuticals, a California corporation
(“Avanir California”), merged with and into the Company on the Effective Date (the
“Merger”) and, as a result of the Merger, the Company succeeded to the indemnification
agreements that Avanir California had entered into with its directors and officers (the “Prior
Agreements”) as well as related indemnification obligations;



     WHEREAS, the Prior Agreements are governed by the General Corporation Law of the State of
California and the Company, which is organized under the General Corporation Law of the State of
Delaware (“DGCL”), wishes to enter into this Agreement to set forth certain rights and
obligations of the Indemnitee and the Company with respect to the Indemnitee’s service as a
director or officer of the Company commencing on the Effective Date;



     WHEREAS, it is essential to the Company that it be able to retain and attract as directors and
officers the most capable persons available;



     WHEREAS, increased corporate litigation has subjected directors and officers to litigation
risks and expenses, and the limitations on the availability of directors and officers liability
insurance have made it increasingly difficult for the Company to attract and retain such persons;



     WHEREAS, the Company’s Certificate of Incorporation and Bylaws (the “Charter” and
“Bylaws,” respectively) require it to indemnify its directors and officers to the fullest
extent permitted by law and permit it to make other indemnification arrangements and agreements;



     WHEREAS, the Company desires to provide Indemnitee with specific contractual assurance of
Indemnitee’s rights to full indemnification against litigation risks and expenses, regardless,
among other things, of any amendment to or revocation of the Charter or Bylaws or any change in the
ownership of the Company or the composition of its Board of Directors (the “Board”);



     WHEREAS, the Company intends that this Agreement provide Indemnitee with greater protection
than that which is provided by the Company’s Charter and Bylaws; and



     WHEREAS, Indemnitee is relying upon the rights afforded under this Agreement in continuing as
a director or officer of the Company, as applicable, and this Agreement shall serve as a supplement
to and in furtherance of the indemnification provided in the Bylaws and any resolutions adopted
pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any
rights of Indemnitee thereunder.



 









 





     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:



     Section 1. Services to the Company. Indemnitee agrees to serve as a director or
officer of the Company, as applicable. Indemnitee may at any time and for any reason resign from
such position (subject to any other contractual obligation or any obligation imposed by law), in
which event the Company shall have no obligation under this Agreement to continue Indemnitee in
such position. This Agreement shall not be deemed an employment contract between the Company (or
any of its subsidiaries or any Enterprise) and Indemnitee. The foregoing notwithstanding, this
Agreement shall continue in force after Indemnitee has ceased to serve as a director or officer of
the Company.



     Section 2. Definitions.



     As used in this Agreement:



          (a) “Corporate Status” describes the status of a person as a current or former
director, officer, employee, agent or trustee of the Company or of any other Enterprise which such
person is or was serving at the request of the Company.




          (b) “Enforcement Expenses” shall include all reasonable attorneys’ fees, retainers,
court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees, and all other
disbursements or expenses of the types customarily incurred in connection with an action to enforce
indemnification or advancement rights, or an appeal from such action, including without limitation
the premium, security for, and other costs relating to any cost bond, supersedes bond, or other
appeal bond or its equivalent.




          (c) “Enterprise” shall mean any corporation (other than the Company), partnership,
joint venture, trust, employee benefit plan or other legal entity of which Indemnitee is or was
serving at the request of the Company as a director, officer, employee, agent or trustee.




          (d) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding or an appeal resulting from a Proceeding, including without
limitation the premium, security for, and other costs relating to any cost bond, supersedes bond,
or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in
settlement by Indemnitee or the amount of judgments or fines against Indemnitee.




          (e) “Independent Counsel” means a law firm, or a partner (or, if applicable, member)
of such a law firm, that is experienced in matters of Delaware corporation law and neither
presently is, nor in the past five years has been, retained to represent: (i) the Company,




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any Enterprise or Indemnitee in any matter material to any such party (other than with respect
to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not
include any person who, under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or Indemnitee in an action to
determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees
and expenses of the Independent Counsel referred to above and to fully indemnify such counsel
against any and all expenses, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.




          (f) The term “Proceeding” shall include any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding, whether brought in the right of
the Company or otherwise and whether of a civil, criminal, administrative or investigative nature,
in which Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that
Indemnitee is or was a director or officer of the Company or is or was serving at the request of
the Company as a director, officer, employee, agent or trustee of any Enterprise or by reason of
any action taken by Indemnitee or of any action taken on Indemnitee’s part while acting as director
or officer of the Company or while serving at the request of the Company as a director, officer,
employee, agent or trustee of any Enterprise, in each case whether or not serving in such capacity
at the time any liability or expense is incurred for which indemnification, reimbursement or
advancement of expenses can be provided under this Agreement; provided, however,
that the term “Proceeding” shall not include any action, suit or arbitration, or part thereof,
initiated by Indemnitee to enforce Indemnitee’s rights under this Agreement as provided for in
Section 13(e) of this Agreement.




     Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened
to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee
shall be indemnified against all Expenses, judgments, fines and amounts paid in settlement actually
and reasonably incurred by Indemnitee or on his or her behalf in connection with such Proceeding or
any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the Company and, in the case of a
criminal proceeding, had no reasonable cause to believe that his or her conduct was unlawful.
Indemnitee shall not enter into any settlement in connection with a Proceeding without the
Company’s prior written consent, which will not be unreasonably withheld.



     Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company
shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or
is threatened to be made, a party to or a participant in any Proceeding by or in the right of the
Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by or on behalf of Indemnitee in
connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good
faith and in a manner reasonably believed to be in or not opposed to



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the best interests of the Company. No indemnification for Expenses shall be made under this
Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally
adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware
Court of Chancery (the “Delaware Court”) or any court in which the Proceeding was brought
shall determine upon application that, despite the adjudication of liability but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification for such
expenses as the Delaware Court or such other court shall deem proper.




     Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provisions of this Agreement and except as provided in Section 8, to the
extent that Indemnitee is a party to or a participant in and is successful, on the merits or
otherwise, in any Proceeding or in defense of any claim, issue or matter therein, the Company shall
indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in
connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful,
on the merits or otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or
matter. For purposes of this Section and without limitation, the termination of any claim, issue
or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.



     Section 6. Indemnification For Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his or her Corporate
Status, a witness in any Proceeding to which Indemnitee is not a party and is not threatened to be
made a party, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred
by or on behalf of Indemnitee in connection therewith.



     Section 7. Additional Indemnification.



          (a) Except as provided in Section 8, notwithstanding any limitation in Sections 3, 4 or 5, the
Company shall indemnify Indemnitee to the fullest extent permitted by law if Indemnitee is a party
to or is threatened to be made a party to any Proceeding (including a Proceeding by or in the right
of the Company to procure a judgment in its favor) against all Expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with the
Proceeding.




          (b) For purposes of Section 7(a), the meaning of the phrase “to the fullest extent permitted
by law” shall include, but not be limited to:




               (i) to the fullest extent permitted by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding provision of any
amendment to or replacement of the DGCL or such provision thereof; and



               (ii) to the fullest extent authorized or permitted by any amendments to or replacements of the
DGCL adopted after the date of this Agreement that increase the extent to which a corporation may
indemnify its directors and officers.



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     Section 8. Exclusions. Notwithstanding any provision in this Agreement to the
contrary, the Company shall not be obligated under this Agreement:



          (a) to make any indemnity for amounts otherwise indemnifiable hereunder (or for which
advancement is provided hereunder) if and to the extent that Indemnitee has otherwise actually
received such amounts under any insurance policy, contract, agreement or otherwise;




          (b) to make any indemnity for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b)
of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or
common law;




          (c) to make any indemnity or advancement in connection with any Proceeding initiated by
Indemnitee against the Company or any director or officer of the Company unless the Company has
joined in or the Board has consented to the initiation of such Proceeding, or the Proceeding is one
to enforce any of the indemnification rights under this Agreement; or




          (d) to make any indemnity or advancement that is prohibited by applicable law.




     Section 9. Advances of Expenses. The Company shall advance, to the extent not
prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding, and such
advancement shall be made within twenty (20) days after the receipt by the Company of a statement
or statements requesting such advances (which shall include invoices received by Indemnitee in
connection with such Expenses but, in the case of invoices in connection with legal services, any
references to legal work performed or to expenditures made that would cause Indemnitee to waive any
privilege accorded by applicable law shall not be included with the invoice) from time to time,
whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and
interest free. Advances shall be made without regard to Indemnitee’s ability to repay the expenses
and without regard to Indemnitee’s ultimate entitlement to indemnification under the other
provisions of this Agreement. Indemnitee shall qualify for advances upon the execution and
delivery to the Company of this Agreement which shall constitute an undertaking providing that
Indemnitee undertakes to the fullest extent required by law to repay the advance if and to the
extent that it is ultimately determined by a court of competent jurisdiction in a final judgment,
not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company. The right
to advances under this paragraph shall in all events continue until final disposition of any
Proceeding, including any appeal therein. Nothing in this Section 9 shall limit Indemnitee’s right
to advancement pursuant to Section 13(e) of this Agreement.



     Section 10. Procedure for Notification and Defense of Claim.



          (a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a
written request therefor and, if Indemnitee so chooses pursuant to Section 11 of this Agreement,
such written request shall also include a request for Indemnitee to have the right to
indemnification determined by Independent Counsel.




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          (b) The Company will be entitled to participate in the Proceeding at its own expense.




     Section 11. Procedure Upon Application for Indemnification.



          (a) Upon written request by Indemnitee for indemnification pursuant to Section 10(a), a
determination, if such determination is required by applicable law, with respect to Indemnitee’s
entitlement thereto shall be made in the specific case: (i) by Independent Counsel in a written
opinion to the Board if Indemnitee so requests in such written request for indemnification pursuant
to Section 10(a), or (ii) by the Company in accordance with applicable law if Indemnitee does not
so request such determination be made by Independent Counsel. In the case that such determination
is made by Independent Counsel, a copy of Independent Counsel’s written opinion shall be delivered
to Indemnitee and, if it is so determined that Indemnitee is entitled to indemnification, payment
to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall
cooperate with the Independent Counsel or the Company, as applicable, making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing to such counsel or
the Company, upon reasonable advance request, any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee
and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees
and disbursements) incurred by Indemnitee in so cooperating with the Independent Counsel or the
Company shall be borne by the Company (irrespective of the determination as to Indemnitee’s
entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee
harmless therefrom.




          (b) In the event that Indemnitee exercises his or her right to have the entitlement to
indemnification determined by Independent Counsel pursuant to clause (i) of Section 11(a), the
Independent Counsel shall be selected by Indemnitee. The Company may, within ten (10) days after
written notice of such selection, deliver to Indemnitee a written objection to such selection;
provided, however, that such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined
in Section 2 of this Agreement, and the objection shall set forth with particularity the factual
basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
Independent Counsel. If such written objection is so made and substantiated, the Independent
Counsel so selected may not serve as Independent Counsel unless and until such objection is
withdrawn or a court has determined that such objection is without merit. If, within twenty (20)
days after the later of (i) submission by Indemnitee of a written request for indemnification and
Independent Counsel pursuant to Sections 10(a) and 11(a)(i) hereof, respectively, and (ii) the
final disposition of the Proceeding, including any appeal therein, no Independent Counsel shall
have been selected without objection, Indemnitee may petition a court of competent jurisdiction for
resolution of any objection which shall have been made by the Company to the selection of
Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the
court or by such other person as the court shall designate. The person with respect to whom all
objections are so resolved or the person so appointed shall act as Independent Counsel under
Section 11(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant
to Section 13(a) of this Agreement, Independent




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Counsel shall be discharged and relieved of any further responsibility in such capacity
(subject to the applicable standards of professional conduct then prevailing).




     Section 12. Presumptions and Effect of Certain Proceedings.



          (a) In making a determination with respect to entitlement to indemnification hereunder, it
shall be presumed that Indemnitee is entitled to indemnification under this Agreement if Indemnitee
has submitted a request for indemnification in accordance with Section 10(a) of this Agreement, and
the Company shall have the burden of proof to overcome that presumption in connection with the
making of any determination contrary to that presumption. Neither (i) the failure of the Company
or of Independent Counsel to have made a determination prior to the commencement of any action
pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee
has met the applicable standard of conduct, nor (ii) an actual determination by the Company or by
Independent Counsel that Indemnitee has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that Indemnitee has not met the applicable standard
of conduct.




          (b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of guilty, nolo contendere or its
equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee
did not act in good faith and in a manner reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his or her conduct was unlawful.




          (c) The knowledge and/or actions, or failure to act, of any other director, officer, agent or
employee of the Company or any Enterprise shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement.




     Section 13. Remedies of Indemnitee.



          (a) Subject to Section 13(f), in the event that (i) a determination is made pursuant to
Section 11 of this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 9 of this Agreement,
(iii) no determination of entitlement to indemnification shall have been made pursuant to Section
11(a) of this Agreement within sixty (60) days after receipt by the Company of the request for
indemnification that does not include a request for Independent Counsel, (iv) payment of
indemnification is not made pursuant to Section 5 or 6 or the last sentence of Section 11(a) of
this Agreement within ten (10) days after receipt by the Company of a written request therefor or
(v) payment of indemnification pursuant to Section 3, 4 or 7 of this Agreement is not made within
ten (10) days after a determination has been made that Indemnitee is entitled to indemnification,
Indemnitee shall be entitled to an adjudication by a court of his or her entitlement to such
indemnification or advancement. Alternatively, Indemnitee, at his or her option, may seek an award
in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules
of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an
adjudication or an award in arbitration within 180 days following the date on which Indemnitee
first has the right to commence such proceeding pursuant to this Section 13(a); provided,
however, that the foregoing time limitation shall not




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apply in respect of a proceeding brought by Indemnitee to enforce his or her rights under
Section 5 of this Agreement. The Company shall not oppose Indemnitee’s right to seek any such
adjudication or award in arbitration.




          (b) In the event that a determination shall have been made pursuant to Section 11(a) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 13 shall be conducted in all respects as a de novo
trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that
adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section
13, the Company shall have the burden of proving Indemnitee is not entitled to indemnification or
advancement, as the case may be.




          (c) If a determination shall have been made pursuant to Section 11(a) of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 13, absent (i) a misstatement
by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.




          (d) The Company shall be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 13 that the procedures and presumptions of this Agreement are
not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement.




          (e) The Company shall indemnify Indemnitee against any and all Enforcement Expenses and, if
requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written
request therefor) advance, to the extent not prohibited by law, such Enforcement Expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee
for indemnification or advancement from the Company under this Agreement or under any directors’
and officers’ liability insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification, advancement or
insurance recovery, as the case may be, in the suit for which indemnification or advancement is
being sought.




          (f) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement to indemnification under this Agreement shall be required to be made prior to the final
disposition of the Proceeding, including any appeal therein.




     Section 14. Non-exclusivity; Survival of Rights; Insurance; Subrogation.



          (a)
The rights of indemnification and to receive advancement as provided by this Agreement
shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled
under applicable law, the Charter, the Bylaws, any agreement, a vote of stockholders or a
resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of
any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in
respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to
such amendment, alteration or repeal. To the extent that a change in




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Delaware law, whether by statute or judicial decision, permits greater indemnification or
advancement than would be afforded currently under the Charter, Bylaws and this Agreement, it is
the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits
so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any
other right or remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other right or remedy.




          (b) The Company shall, from time to time, make the good faith determination whether or not it
is practicable for the Company to obtain and maintain a policy or policies of insurance with a
reputable insurance company providing the Indemnitee with coverage for losses from wrongful acts.
For so long as Indemnitee shall remain a director or officer of the Company and with respect to any
such prior service, in all policies of director and officer liability insurance, Indemnitee shall
be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as
are afforded to the most favorably insured of the Company’s officers and directors.
Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain such
insurance if the Company determines in good faith that such insurance is not reasonably available,
if the premium costs for such insurance are disproportionate to the amount of coverage provided, or
if the coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit. The Company shall promptly notify Indemnitee of any good faith determination
not to provide such coverage. If, at the time of the receipt of a notice of a claim pursuant to
the terms hereof, the Company has director and officer liability insurance in effect, the Company
shall give prompt notice of the commencement of such proceeding to the insurers in accordance with
the procedures set forth in the respective policies. The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts
payable as a result of such proceeding in accordance with the terms of such policies.
Notwithstanding the foregoing, if the Company does not obtain or maintain a policy or policies of
director and officer liability insurance with aggregate coverage limits of at least Ten Million
Dollars ($10,000,000), then upon written request by Indemnitee for indemnification pursuant to
Section 10(a), the Company shall promptly deposit into an escrow account cash in an amount equal to
Five Hundred Thousand Dollars ($500,000) to secure potential payment obligations for the
advancement of Expenses and any other amounts potentially payable to Indemnitee hereunder, as well
as other directors, officers and agents to be indemnified in connection with such Proceeding.




          (c) In the event of any payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights. The Company hereby
acknowledges that Indemnitee may have certain rights to indemnification, advancement of expenses
and/or insurance provided by certain third parties and their affiliates (collectively, the
“Third-Party Indemnitors”). The Company hereby agrees (i) that it is the indemnitor of
first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Third-Party
Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities
incurred by Indemnitee are secondary), (ii) that it shall be required to advance the full amount of
expenses incurred by Indemnitee and shall be liable for




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the full amount of all Expenses, judgments, penalties, fines and amounts paid in settlement to
the extent legally permitted and as required by the terms of this Agreement and the Charter or
Bylaws of the Company (or any other agreement between the Company and Indemnitee), without regard
to any rights Indemnitee may have against the Third-Party Indemnitors, and, (iii) that it
irrevocably waives, relinquishes and releases the Third-Party Indemnitors from any and all claims
against the Third-Party Indemnitors for contribution, subrogation or any other recovery of any kind
in respect thereof. The Company further agrees that no advancement or payment by the Third-Party
Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought
indemnification from the Company shall affect the foregoing and the Third-Party Indemnitors shall
have a right of contribution and/or be subrogated to the extent of such advancement or payment to
all of the rights of recovery of Indemnitee against the Company. The Company and Indemnitee agree
that the Third-Party Indemnitors are express third-party beneficiaries of the terms of this Section
14(c).




          (d) The Company’s obligation to provide indemnification or advancement hereunder to Indemnitee
who is or was serving at the request of the Company as a director, officer, employee, agent or
trustee of any other Enterprise shall be reduced by any amount Indemnitee has actually received as
indemnification or advancement from such other Enterprise.




     Section 15. Duration of Agreement. This Agreement shall continue until and terminate
upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as
a director or officer of the Company or (b) one (1) year after the final termination of any
Proceeding, including any appeal, then pending in respect of which Indemnitee is granted rights of
indemnification or advancement hereunder and of any proceeding commenced by Indemnitee pursuant to
Section 13 of this Agreement relating thereto. This Agreement shall be binding upon the Company and
its successors and assigns and shall inure to the benefit of Indemnitee and his or her heirs,
executors and administrators. The Company shall require and cause any successor (whether direct or
indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a
substantial part, of the business and/or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to perform if no such
succession had taken place.



     Section 16. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including without limitation,
each portion of any section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any
way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by
law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform
to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to
the fullest extent possible, the provisions of this Agreement (including, without limitation, each
portion of any section of this Agreement containing any such provision held to be invalid, illegal
or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.



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     Section 17. Enforcement.



          (a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director
or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving the Company in such capacity.




          (b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof, including the Prior
Agreement; provided, however, that this Agreement is a supplement to and in
furtherance of the Charter, the Bylaws and applicable law, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and provided,
further, that this Agreement shall not affect any rights or obligations arising under the
Prior Agreements to the extent that they relate to actions or omissions actually or allegedly taken
by the Indemnitee in his or her capacity as a director, officer, employee or other agent of Avanir
California.




     Section 18. Modification and Waiver. No supplement, modification or amendment, or
waiver of any provision, of this Agreement shall be binding unless executed in writing by the
parties thereto. No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a
continuing waiver.



     Section 19. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in
writing upon being served with any summons, citation, subpoena, complaint, indictment, information
or other document relating to any Proceeding or matter which may be subject to indemnification or
advancement as provided hereunder. The failure of Indemnitee to so notify the Company shall not
relieve the Company of any obligation which it may have to Indemnitee under this Agreement or
otherwise.



     Section 20. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by
hand and receipted for by the party to whom said notice or other communication shall have been
directed, (b) mailed by certified or registered mail with postage prepaid, on the third business
day after the date on which it is so mailed, or (c) mailed by reputable overnight courier and
receipted for by the party to whom said notice or other communication shall have been directed:



          (a) If to Indemnitee, at such address as Indemnitee shall provide to the Company.




          (b) If to the Company to:



Avanir Pharmaceuticals, Inc.

101 Enterprise, Suite 300

Aliso Viejo, California 92656

Attn: Corporate Secretary



or to any other address as may have been furnished to Indemnitee by the Company.





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     Section 21. Contribution. To the fullest extent permissible under applicable law, if
the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to
be paid in settlement and/or for Expenses, in connection with any Proceeding in such proportion as
is deemed fair and reasonable in light of all of the circumstances in order to reflect (i) the
relative benefits received by the Company and Indemnitee in connection with the event(s) and/or
transaction(s) giving rise to such Proceeding; and/or (ii) the relative fault of the Company (and
its directors, officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transactions.



     Section 22. Applicable Law and Consent to Jurisdiction. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware, without regard to its conflict of laws rules. Except with
respect to any arbitration commenced by Indemnitee pursuant to Section 13(a) of this Agreement, the
Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought only in the
Delaware Court, and not in any other state or federal court in the United States of America or any
court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware
Court for purposes of any action or proceeding arising out of or in connection with this Agreement,
(iii) consent to service of process at the address set forth in Section 20 of this Agreement with
the same legal force and validity as if served upon such party personally within the State of
Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the
Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or
proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.



     Section 23. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. Only one such counterpart signed by the party
against whom enforceability is sought needs to be produced to evidence the existence of this
Agreement.



     Section 24. Miscellaneous. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this Agreement or to
affect the construction thereof.



     IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year
first above written.



	 	 	 	 	 
	 	AVANIR Pharmaceuticals, Inc.

 	 
	 	By:  	 	 
	 	 	[Name]  	 
	 	 	[Office] 	 
	 
	 	 	 
	 	  	
 	 
	 	 	[Indemnitee] 	 
	 	 	[Name] 	 
	 




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