Exhibit 10.3
Execution Copy     
REGISTRATION RIGHTS AGREEMENT
     This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of
May 21st, 2008, is by and between SOMAXON PHARMACEUTICALS, INC. (the “Company”)
and KINGSBRIDGE CAPITAL LIMITED (the “Investor”).
     WHEREAS, the Company and the Investor have entered into that certain Common
Stock Purchase Agreement, dated as of the date hereof (the “Purchase
Agreement”), pursuant to which the Company may issue, from time to time, to the
Investor up to $50 million worth of shares of Common Stock as provided for
therein;
     WHEREAS, pursuant to the terms of, and in partial consideration for the
Investor entering into, the Purchase Agreement, the Company has issued to the
Investor a warrant, exercisable from time to time, in accordance with its terms,
within five (5) years following the six-month anniversary of the date of
issuance (the “Warrant”) for the purchase of an aggregate of up to 165,000
shares of Common Stock at a price specified in such Warrant;
     WHEREAS, pursuant to the terms of, and in partial consideration for, the
Investor’s agreement to enter into the Purchase Agreement, the Company has
agreed to provide the Investor with certain registration rights with respect to
the Registrable Securities (as defined in the Purchase Agreement) as set forth
herein;
     NOW, THEREFORE, in consideration of the premises, the representations,
warranties, covenants and agreements contained herein, in the Warrant, and in
the Purchase Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, intending to be legally
bound hereby, the parties hereto agree as follows (capitalized terms used herein
and not defined herein shall have the respective meanings ascribed to them in
the Purchase Agreement):
ARTICLE I
REGISTRATION RIGHTS
     Section 1.1 Registration Statement.
          (a) Filing of the Registration Statement. Upon the terms and subject
to the conditions set forth in this Agreement, the Company shall file with the
Commission within sixty (60) calendar days after the Closing Date a registration
statement in the Company’s sole discretion, on either Form S-1 or Form S-3 under
the Securities Act or such other form as deemed appropriate by counsel to the
Company for the registration for the resale by the Investor of the Registrable
Securities (the “Registration Statement”).
          (b) Effectiveness of the Registration Statement. The Company shall use
commercially reasonable efforts (i) to have the Registration Statement declared
effective by the Commission as soon as reasonably practicable, but in any event
no later than one hundred eighty (180) calendar days after the Closing Date and
(ii) to ensure that the Registration Statement remains

 

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in effect throughout the term of this Agreement as set forth in Section 4.2,
subject to the terms and conditions of this Agreement.
          (c) Regulatory Disapproval; Breach by the Investor. The contemplated
effective date for the Registration Statement as described in Section 1.1(b)
shall be extended without default or the accrual of liquidated damages hereunder
or under the Purchase Agreement in the event that the Company’s failure to
obtain the effectiveness of the Registration Statement on a timely basis results
from (i) the Commission’s disapproval of the structure of the transactions
contemplated by the Purchase Agreement or (ii) events or circumstances that are
not in any way attributable to the Company. In such event, the parties agree to
cooperate with one another in good faith to arrive at a resolution acceptable to
the Commission. In addition, the contemplated effective date for the
Registration Statement as described in Section 1.1(b) shall be extended without
default or the accrual of liquidated damages hereunder or under the Purchase
Agreement in the event that the Company’s failure to obtain the effectiveness of
the Registration Statement on a timely basis results solely from a breach by the
Investor of its obligations under the Purchase Agreement or under this
Agreement.
          (d) Failure to Maintain Effectiveness of Registration Statement. In
the event the Company fails to maintain the effectiveness of the Registration
Statement (or the Prospectus) throughout the period set forth in Section 4.2,
other than temporary suspensions as set forth in Section 1.1(e) and the Investor
holds any Registrable Securities at any time during the period of such
ineffectiveness (an “Ineffective Period”), and provided that such failure to
maintain effectiveness was within the reasonable control of the Company (for the
avoidance of doubt, the suspension of effectiveness of the Registration
Statement as the result of filing a post-effective amendment to the Registration
Statement when required pursuant to Section 10(a)(3) under the Securities Act or
Item 512(a)(1) of Regulation S-K shall be deemed not to be within the reasonable
control of the Company), the Company shall pay on demand to the Investor in
immediately available funds into an account designated by the Investor an amount
equal to the product of (i) the total number of Registrable Securities issued to
the Investor under the Purchase Agreement (which, for the avoidance of doubt,
shall not include any Warrant Shares) and owned by the Investor at any time
during such Ineffective Period (and not otherwise sold, hypothecated or
transferred) and (ii) the result, if greater than zero, obtained by subtracting
the VWAP on the Trading Day immediately following the last day of such
Ineffective Period from the VWAP on the Trading Day immediately preceding the
day on which any such Ineffective Period began; provided, however, that (A) the
foregoing payments shall not apply in respect of Registrable Securities (I) that
are otherwise freely tradable by the Investor, including pursuant to Rule 144
under the Securities Act (as such Rule may be amended from time to time,
“Rule 144”) or (II) if the Company offers to repurchase from the Investor such
Registrable Securities for a per share purchase price equal to the VWAP on the
Trading Day immediately preceding the day on which any such Ineffective Period
began and (B) unless otherwise required by any applicable federal and state
securities laws, the Company shall be under no obligation to supplement the
Prospectus to reflect the issuance of any Shares pursuant to a Draw Down at any
time prior to the day following the last to occur Settlement Date with respect
to such Draw Down and that the failure to supplement the Prospectus prior to
such time shall not be deemed a failure to maintain the effectiveness of the
Registration Statement (or Prospectus) for purposes of this Agreement (including
this Section 1.1(d)).
          (e) Deferral or Suspension During a Blackout Period. Notwithstanding
the provisions of Section 1.1(d), if in the good faith judgment of the Company,
following consultation

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with legal counsel, it would be detrimental to the Company or its stockholders
for the Registration Statement to be filed or for resales of Registrable
Securities to be made pursuant to the Registration Statement due to (i) the
existence of a material development or potential material development involving
the Company that the Company would be obligated to disclose or incorporate by
reference in the Registration Statement, which disclosure would be premature or
otherwise inadvisable at such time or would have a Material Adverse Effect on
the Company or its stockholders, or (ii) a filing of a Company-initiated
registration of any class of its equity securities, which, in the good faith
judgment of the Company, would adversely affect or require premature disclosure
of the filing of such Company-initiated registration (notice thereof, a
“Blackout Notice”), the Company shall have the right to (A) immediately defer
such filing for a period of not more than sixty (60) days beyond the date by
which such Registration Statement was otherwise required hereunder to be filed
or (B) suspend use of such Registration Statement for a period of not more than
thirty (30) days (any such deferral or suspension period, a “Blackout Period”).
The Investor acknowledges that it would be seriously detrimental to the Company
and its stockholders for such Registration Statement to be filed (or remain in
effect) during a Blackout Period and therefore essential to defer such filing
(or suspend the use thereof) during such Blackout Period and agrees to cease any
disposition of the Registrable Securities during such Blackout Period. The
Company may not utilize any of its rights under this Section 1.1(e) to defer the
filing of a Registration Statement (or suspend its effectiveness) more than six
(6) times in any twelve (12) month period. In the event that, within fifteen
(15) Trading Days following any Settlement Date, the Company delivers a Blackout
Notice to the Investor and the VWAP on the Trading Day immediately preceding
such Blackout Period (“Old VWAP”) is greater than the VWAP on the first Trading
Day following such Blackout Period that the Investor may sell its Registrable
Securities pursuant to an effective Registration Statement (“New VWAP”), then
the Company shall pay to the Investor, by wire transfer of immediately available
funds to an account designated by the Investor, the “Blackout Amount.” For the
purposes of this Agreement, Blackout Amount means a percentage equal to: (X) in
the event that the Registration Statement was effective on Form S-3 on the
Trading Day immediately prior to such Blackout Period (1) seventy-five percent
(75%) if such Blackout Notice is delivered prior to the fifth (5th) Trading Day
following such Settlement Date; (2) fifty percent (50%) if such Blackout Notice
is delivered on or after the fifth (5th) Trading Day following such Settlement
Date, but prior to the tenth (10th) Trading Day following such Settlement Date;
(3) twenty-five percent (25%) if such Blackout Notice is delivered on or after
the tenth (10th) Trading Day following such Settlement Date, but prior to the
fifteenth (15th) Trading Day following such Settlement Date; and (4) zero
percent (0%) thereafter of: the product of (i) the number of Registrable
Securities purchased by the Investor pursuant to the most recent Draw Down and
actually held by the Investor immediately prior to the Blackout Period and
(ii) the result, if greater than zero, obtained by subtracting the New VWAP from
the Old VWAP or (Y) in the event that the Registration Statement was effective
on a form other than Form S-3 on the Trading Day immediately preceding such
Blackout Period, one hundred percent (100%); provided, however, that no Blackout
Amount shall be payable in respect of Registrable Securities (A) that are
otherwise freely tradable to United States Persons by the Investor, including
under Rule 144, during the Blackout Period, or (B) if the Company offers to
repurchase from the Investor such Registrable Securities for a per share
purchase price at least equal to the VWAP on the Trading Day immediately
preceding the day on which any such Blackout Period began. For any Blackout
Period in respect of which a Blackout Amount becomes due and payable, rather
than paying the Blackout Amount, the Company may at its sole discretion, issue
to the Investor shares of Common Stock with

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an aggregate market value determined as of the first Trading Day following such
Blackout Period equal to the Blackout Amount (“Blackout Shares”).
          (f) Liquidated Damages. The Company and the Investor hereto
acknowledge and agree that the amounts payable under Sections 1.1(d) and 1.1(e)
and the Blackout Shares deliverable under Section 1.1(e) above shall constitute
liquidated damages and not penalties. The parties further acknowledge that
(A) the amount of loss or damages likely to be incurred by the Investor is
incapable or is difficult to precisely estimate, (B) the amounts specified in
such subsections bear a reasonable proportion and are not plainly or grossly
disproportionate to the probable loss likely to be incurred in connection with
any failure by the Company to obtain or maintain the effectiveness of the
Registration Statement, (C) one of the reasons for the Company and the Investor
reaching an agreement as to such amounts was the uncertainty and cost of
litigation regarding the question of actual damages, and D) the Company and the
Investor are sophisticated business parties and have been represented by
sophisticated and able legal and financial counsel and negotiated this Agreement
at arm’s length. The Investor further agrees that, in the event that the Company
makes payments and/or deliveries on a timely basis of the amounts set forth in
Sections 1.1(d) and/or 1.1(e), the Company’s deferral or suspension of the
Registration Statement pursuant to such Section 1.1(d) and/or 1.1(e) shall not
constitute a material breach or default of the Company’s obligations to the
Investor and such payments and/or deliveries shall constitute the Investor’s
sole remedy in respect thereof.
          (g) Additional Registration Statements. In the event and to the extent
that the Registration Statement fails to register a sufficient amount of Common
Stock necessary for the Company to issue and sell to the Investor and the
Investor to purchase from the Company all of the Registrable Securities to be
issued, sold and purchased under the Purchase Agreement and the Warrant, the
Company shall, upon a timetable mutually agreeable to both the Company and the
Investor, prepare and file with the Commission an additional registration
statement or statements in order to effectuate the purpose of this Agreement,
the Purchase Agreement, and the Warrant. Such delay in registering such
Registrable Securities shall not be subject to the payments by the Company of
the amounts set forth in Section 1.1(e) nor shall such delay constitute a
material breach or default of the Company’s obligations to the Investor.
ARTICLE II
REGISTRATION PROCEDURES
     Section 2.1 Filings; Information. The Company shall effect the registration
with respect to the sale of the Registrable Securities by the Investor in
accordance with the intended methods of disposition thereof. Without limiting
the foregoing, the Company in each such case will do the following as
expeditiously as possible, but in no event later than the deadline, if any,
prescribed therefor in this Agreement:
          (a) Subject to Section 1.1(e), the Company shall (i) prepare and file
with the Commission the Registration Statement; (ii) use commercially reasonable
efforts to cause such filed Registration Statement to become and to remain
effective (pursuant to Rule 415 under the Securities Act or otherwise);
(iii) prepare and file with the Commission such amendments and supplements to
the Registration Statement and the Prospectus used in connection therewith as
may be necessary to

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keep such Registration Statement effective for the time period prescribed by
Section 4.2 and in order to effectuate the purpose of this Agreement, the
Purchase Agreement, and the Warrant; and (iv) comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement during such period in accordance with the intended
methods of disposition by the Investor set forth in such Registration Statement;
provided, however, that the Investor shall be responsible for the delivery of
the Prospectus to the Persons to whom the Investor sells the Shares and the
Warrant Shares, and the Investor agrees to dispose of Registrable Securities in
compliance with the plan of distribution described in the Registration Statement
and otherwise in compliance with all applicable federal and state securities
laws.
          (b) The Company shall deliver to the Investor and its counsel, in
accordance with the notice provisions of Section 4.8, such number of copies of
the Registration Statement, each amendment and supplement thereto (in each case
including all exhibits thereto), the Prospectus (including each preliminary
prospectus) and such other documents or information as the Investor or counsel
may reasonably request in order to facilitate the disposition of the Registrable
Securities, provided, however, that to the extent reasonably practicable, such
delivery may be accomplished via electronic means.
          (c) After the filing of the Registration Statement, the Company shall
promptly notify the Investor of any stop order issued or threatened by the
Commission in connection therewith and take commercially reasonable actions
required to prevent the entry of such stop order or to remove it if entered.
          (d) The Company shall use commercially reasonable efforts to
(i) register or qualify the sale of the Registrable Securities by the Investor
under such other securities or blue sky laws of each jurisdiction in the United
States as the Investor may reasonably (in light of its intended plan of
distribution) request, and (ii) cause the sale of the Registrable Securities by
the Investor to be registered with or approved by such other governmental
agencies or authorities in the United States as may be necessary by virtue of
the business and operations of the Company and do any and all other customary
acts and things that may be reasonably necessary or advisable to enable the
Investor to consummate the disposition of the Registrable Securities; provided,
however, that the Company will not be required to qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 2.1(d), subject itself to taxation in any such
jurisdiction, consent or subject itself to general service of process in any
such jurisdiction, change any existing business practices, benefit plans or
outstanding securities or amend or otherwise modify the Certificate or Bylaws.
          (e) The Company shall make available to the Investor (and will deliver
to Investor’s counsel), (i) subject to restrictions imposed by the United States
federal government or any agency or instrumentality thereof, copies of all
public correspondence between the Commission and the Company concerning the
Registration Statement and will also make available for inspection by the
Investor and any attorney, accountant or other professional retained by the
Investor (collectively, the “Inspectors”), (ii) upon reasonable advance notice
during normal business hours, all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the “Records”)
as shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers and employees to supply all
information reasonably requested by any Inspectors in connection with the
Registration Statement; provided,

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however, that (i) the Company shall not be obligated to disclose any portion of
the Records consisting of either (A) material non-public information or
(B) confidential information of a third party and (ii) any such Inspectors must
agree in writing for the benefit of the Company not to use or disclose any such
Records except as provided in this Section 2.1(e). Records that the Company
determines, in good faith, to be confidential and that it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless the
disclosure or release of such Records is requested or required pursuant to oral
questions, interrogatories, requests for information or documents or a subpoena
or other order from a court of competent jurisdiction or other judicial or
governmental process; provided, however, that prior to any disclosure or release
pursuant to the immediately preceding clause, the Inspectors shall provide the
Company with prompt notice of any such request or requirement so that the
Company may seek an appropriate protective order or waive such Inspectors’
obligation not to disclose such Records; and, provided, further, that if failing
the entry of a protective order or the waiver by the Company permitting the
disclosure or release of such Records, the Inspectors, upon advice of counsel,
are compelled to disclose such Records, the Inspectors may disclose only that
portion of the Records that counsel has advised the Inspectors that the
Inspectors are compelled to disclose; provided, however, that upon any such
required disclosure, such Inspector shall use his or her best efforts to obtain
reasonable assurances that confidential treatment will be afforded such
information. The Investor agrees that information obtained by it solely as a
result of such inspections (not including any information obtained from a third
party who, insofar as is known to the Investor after reasonable inquiry, is not
prohibited from providing such information by a contractual, legal or fiduciary
obligation to the Company) shall be deemed confidential and shall not be used
for any purposes other than as indicated above or by it as the basis for any
market transactions in the securities of the Company or its affiliates unless
and until such information is made generally available to the public. The
Investor further agrees that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of the Records deemed confidential.
          (f) The Company shall otherwise comply in all material respects with
the applicable rules and regulations of the Commission, including, without
limitation, compliance with applicable reporting requirements under the Exchange
Act.
          (g) The Investor shall cooperate with the Company, as reasonably
requested by the Company, in connection with the preparation and filing of any
Registration Statement hereunder. The Company may require the Investor to
promptly furnish in writing to the Company such information as may be required
in connection with such registration including, without limitation, all such
information as may be requested by the Commission, the NASDAQ Stock Market or
FINRA or any state securities commission and all such information regarding the
Investor, the Registrable Securities held by the Investor and the intended
method of disposition of the Registrable Securities. The Investor agrees to
provide such information requested in connection with such registration within
five (5) business days after receiving such written request and the Company
shall not be responsible for, or incur any penalties under this Agreement with
respect to, any delays in obtaining or maintaining the effectiveness of the
Registration Statement caused by the Investor’s failure to timely provide such
information.
          (h) Upon receipt of a Blackout Notice from the Company, the Investor
shall immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement

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covering such Registrable Securities until (i) the Company advises the Investor
that the Blackout Period has terminated and (ii) the Investor receives copies of
a supplemented or amended prospectus, if necessary. If so directed by the
Company, the Investor will deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in the Investor’s possession (other than a limited number of file
copies) of the prospectus covering such Registrable Securities that is current
at the time of receipt of such notice.
     Section 2.2 Registration Expenses. Except as set forth in Section 10.1 of
the Purchase Agreement, the Company shall pay all registration expenses incurred
in connection with the Registration Statement (the “Registration Expenses”),
including, without limitation: (a) all registration, filing, securities exchange
listing and fees required by the NASDAQ Stock Market LLC, (b) all registration,
filing, qualification and other fees and expenses of compliance with securities
or blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities), (c) all
word processing, duplicating, printing, messenger and delivery expenses, (d) the
Company’s internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
(e) the fees and expenses incurred by the Company in connection with the listing
of the Registrable Securities, (f) reasonable fees and disbursements of counsel
for the Company and customary fees and expenses for independent certified public
accountants retained by the Company (including the expenses of any special
audits or comfort letters or costs associated with the delivery by independent
certified public accountants of such special audit(s) or comfort letter(s),
(g) the fees and expenses of any special experts retained by the Company in
connection with such registration and amendments and supplements to the
Registration Statement and Prospectus, and (h) premiums and other costs of the
Company for policies of insurance against liabilities arising out of any public
offering of the Registrable Securities being registered. Any fees and
disbursements of underwriters, broker-dealers or investment bankers, including
without limitation underwriting fees, discounts, transfer taxes or commissions,
and any other fees or expenses (including legal fees and expenses) if any,
attributable to the sale of Registrable Securities, shall be payable by each
holder of Registrable Securities pro rata on the basis of the number of
Registrable Securities of each such holder that are included in a registration
under this Agreement.
ARTICLE III
INDEMNIFICATION
     Section 3.1 Indemnification. The Company agrees to indemnify and hold
harmless the Investor, its partners, affiliates, officers, directors, employees
and duly authorized agents, and each Person or entity, if any, who controls the
Investor within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, together with the partners, affiliates, officers, directors,
employees and duly authorized agents of such controlling Person or entity
(collectively, the “Controlling Persons”), from and against any loss, claim,
damage, liability, costs and expenses (including, without limitation, reasonable
attorneys’ fees and disbursements and costs and expenses of investigating and
defending any such claim) (collectively, “Damages”), joint or several, and any
action or proceeding in respect thereof to which the Investor, its partners,
affiliates, officers, directors, employees and duly authorized agents, and any
Controlling Person, may become subject under the Securities Act or otherwise, as
incurred, insofar as such Damages (or actions or proceedings in respect thereof)
arise out of, or are based upon, any untrue statement or alleged

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untrue statement of a material fact contained in any Registration Statement, or
in any preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement relating to the Registrable Securities or arises out of, or are
based upon, any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein under
the circumstances not misleading, and shall reimburse the Investor, its
partners, affiliates, officers, directors, employees and duly authorized agents,
and each such Controlling Person, for any legal and other expenses reasonably
incurred by the Investor, its partners, affiliates, officers, directors,
employees and duly authorized agents, or any such Controlling Person, as
incurred, in investigating or defending or preparing to defend against any such
Damages or actions or proceedings; provided, however, that the Company shall not
be liable to the extent that any such Damages arise out of the Investor’s (or
any other indemnified Person’s) failure to send or give a copy of the final
prospectus or supplement (as then amended or supplemented) to the persons
asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of Registrable
Securities to such person if such statement or omission was corrected in such
final prospectus or supplement; provided, further, that the Company shall not be
liable to the extent that any such Damages arise out of or are based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement, or any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Investor or any other person who participates as an underwriter in the
offering or sale of such securities, in either case, specifically stating that
it is for use in the preparation thereof. In connection with any Registration
Statement with respect to which the Investor is participating, the Investor will
indemnify and hold harmless, to the same extent and in the same manner as set
forth in the preceding paragraph, the Company, each of its partners, affiliates,
officers, directors, employees and duly authorized agents, and each person or
entity, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, together with the partners,
affiliates, officers, directors, employees and duly authorized agents of such
controlling Person (each, a “Company Indemnified Person”) against any Damages to
which any Company Indemnified Person may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such Damages arise out of or are
based upon (a) any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement, or in any preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement relating to the
Registrable Securities or arise out of, or are based upon, any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein under the circumstances not
misleading to the extent that such violation occurs in reliance upon and in
conformity with written information furnished to the Company by the Investor or
on behalf of the Investor expressly for use in connection with such Registration
Statement, or (b) any failure by the Investor to comply with prospectus delivery
requirements of the Securities Act, or any other failure to comply with the
Securities Act, the Exchange Act or any other law or legal requirement
applicable to sales under the Registration Statement.
     Section 3.2 Conduct of Indemnification Proceedings. All claims for
indemnification under Section 3.1 shall be asserted and resolved in accordance
with the provisions of Section 9.2 of the Purchase Agreement.
     Section 3.3 Additional Indemnification. Indemnification similar to that
specified in the preceding paragraphs of this Article III (with appropriate
modifications) shall be given by the

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Company and the Investor with respect to any required registration or other
qualification of Registrable Securities under any federal or state law or
regulation of any governmental authority other than the Securities Act. The
provisions of this Article III shall be in addition to any other rights to
indemnification, contribution or other remedies which an indemnified party may
have pursuant to law, equity, contract or otherwise.
To the extent that any indemnification provided for herein is prohibited or
limited by law, the indemnifying party will make the maximum contribution with
respect to any amounts for which it would otherwise be liable under this
Article III to the fullest extent permitted by law. However, (a) no contribution
will be made under circumstances where the maker of such contribution would not
have been required to indemnify the indemnified party under the fault standards
set forth in this Article III, (b) if the Investor is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act),
the Investor will not be entitled to contribution from any Person who is not
guilty of such fraudulent misrepresentation, and (c) contribution (together with
any indemnification obligations under this Agreement) by the Investor will be
limited in amount to the proceeds received by the Investor from sales of
Registrable Securities.
ARTICLE IV
MISCELLANEOUS
     Section 4.1 No Outstanding Registration Rights. Except as otherwise
disclosed in accordance with the Purchase Agreement or in the Commission
Documents, the Company represents and warrants to the Investor that there is not
in effect on the date hereof any agreement by the Company pursuant to which any
holders of securities of the Company have a right to cause the Company to
register or qualify such securities under the Securities Act or any securities
or blue sky laws of any jurisdiction.
     Section 4.2 Term. The registration rights provided to the holders of
Registrable Securities hereunder, and the Company’s obligation to keep the
Registration Statement effective, shall terminate at the earlier of (a) such
time that is two (2) years following the termination of the Purchase Agreement,
(b) such time as all Registrable Securities have been issued and have ceased to
be Registrable Securities, or (c) upon the consummation of an “Excluded Merger
or Sale” as defined in the Warrant. Notwithstanding the foregoing, Article III,
Section 4.7, Section 4.8, Section 4.9, Section 4.10 and Section 4.13 shall
survive the termination of this Agreement.
     Section 4.3 Rule 144. The Company will, at its expense, promptly take such
action as holders of Registrable Securities may reasonably request to enable
such holders of Registrable Securities to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144, as such Rule may be amended from time to time, or
(b) any similar rule or regulation hereafter adopted by the Commission. If at
any time the Company is not required to file reports under Section 13 or 15(d)
of the Exchange Act, it will, at its expense, forthwith upon the written request
of any holder of Registrable Securities, make available adequate current public
information with respect to the Company within the meaning of Rule 144(c)(1) or
such other information to the extent necessary to permit sales pursuant to Rule
144. Upon the request of the Investor, the Company will deliver to the Investor
a written

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statement, signed by the Company’s principal financial officer, as to whether it
has complied with such requirements.
     Section 4.4 Certificate. The Company will, at its expense, forthwith upon
the request of any holder of Registrable Securities, deliver to such holder a
certificate, signed by the Company’s principal financial officer, stating
(a) the Company’s name, address and telephone number (including area code),
(b) the Company’s Internal Revenue Service identification number, (c) the
Company’s Commission file number, (d) the number of shares of each class of
Stock outstanding as shown by the most recent report or statement published by
the Company, and (e) whether the Company has filed the reports required to be
filed under the Exchange Act for a period of at least ninety (90) days prior to
the date of such certificate and in addition has filed the most recent annual
report required to be filed thereunder.
     Section 4.5 Amendment and Modification. Any provision of this Agreement may
be waived, provided that such waiver is set forth in a writing executed the
party to this Agreement for the benefit of whom the provision being waived was
intended. The provisions of this Agreement, including the provisions of this
sentence, may be amended, modified or supplemented, only with the written
consent of the Investor and the Company. No course of dealing between or among
any Person having any interest in this Agreement will be deemed effective to
modify, amend or discharge any part of this Agreement or any rights or
obligations of any person under or by reason of this Agreement.
     Section 4.6 Successors and Assigns; Entire Agreement. This Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns. The
Company may assign this Agreement at any time in connection with a sale or
acquisition of the Company, whether by merger, consolidation, sale of all or
substantially all of the Company’s assets, or similar transaction, without the
consent of the Investor, provided that the successor or acquiring Person or
entity agrees in writing to assume all of the Company’s rights and obligations
under this Agreement. Investor may assign its rights and obligations under this
Agreement only with the prior written consent of the Company, and any purported
assignment by the Investor absent the Company’s consent shall be null and void.
This Agreement, together with the Purchase Agreement and the Warrant sets forth
the entire agreement and understanding between the parties as to the subject
matter hereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
     Section 4.7 Severability. If any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision; provided that, if the severance of such provision materially changes
the economic benefits of this Agreement to either party as such benefits are
anticipated as of the date hereof, then such party may terminate this Agreement
on five (5) business days prior written notice to the other party. In such
event, the Purchase Agreement will terminate simultaneously with the termination
of this Agreement.
     Section 4.8 Notices. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be given in
accordance with Section 10.4 of the Purchase Agreement.

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     Section 4.9 Governing Law. This Agreement shall be construed under the laws
of the State of New York, without regard to principles of conflicts of law that
would result in the application of any law other than the laws of the State of
New York.
     Section 4.10 Headings. The headings in this Agreement are for convenience
of reference only and shall not constitute a part of this Agreement, nor shall
they affect their meaning, construction or effect.
     Section 4.11 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original instrument and all
of which together shall constitute one and the same instrument.
     Section 4.12 Further Assurances. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
     Section 4.13 Absence of Presumption. This Agreement shall be construed
without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be
drafted.

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.

            KINGSBRIDGE CAPITAL LIMITED
      By:   /s/ Tony Gardner-Hillman         Tony Gardner-Hillman       
Director        SOMAXON PHARMACEUTICALS, INC.
      By:   /s/ Meg M. McGilley         Name:   Meg M. McGilley        Title:  
Vice President and Chief Financial Officer     

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