Document:

Exhibit 10.1

Exhibit 10.1

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT (INDICATED BY ASTERISKS) HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.

CO-PROMOTION AGREEMENT

This PROMOTION AGREEMENT (this “Agreement”) is made as of August 24, 2010 (the
“Effective Date”), by and between The Procter & Gamble Distributing Company LLC, a Delaware
limited liability company (“Partner”), and Somaxon Pharmaceuticals, Inc., a Delaware
corporation (“Somaxon”). Each of Somaxon and Partner is referred to herein individually as
a “party” and collectively as the “parties.”

WHEREAS, Somaxon desires to engage Partner to promote and market the Products in the Territory
(each as defined below), and Partner desires to promote and market the Products, all in accordance
with the terms and conditions contained herein;

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants herein
contained, the parties hereto intending to be legally bound hereby agree as follows:

ARTICLE I

DEFINITIONS

As used in this Agreement, the following terms shall have the following meanings:

Section 1.1 “3mg Product” means the formulation of 3 mg of doxepin that is the subject
of NDA No. 22-036 filed with FDA on January 31, 2008 (as such NDA may be amended or supplemented
subsequent to the filing date).

Section 1.2 “6mg Product” means the formulation of 6 mg of doxepin that is the subject
of NDA No. 22-036 filed with FDA on January 31, 2008 (as such NDA may be amended or supplemented
subsequent to the filing date).

Section 1.3 “Acquired Product” has the meaning set forth in Section 2.3.

Section 1.4 “Act” means the United States Federal Food, Drug and Cosmetic Act, 21
U.S.C. 301, et. seq., as it may be amended from time to time, and the regulations promulgated
thereunder, including the Generic Drug Act.

Section 1.5 “Adverse Drug Experience” means any “adverse drug experience” as defined
or contemplated by 21 C.F.R. 314.80 or 312.32, associated with a Product.

Section 1.6 “Adverse Drug Experience Report” means any oral, written or electronic
report of any Adverse Drug Experience transmitted to any Person.

Section 1.7 “Affiliate” means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common control with, such first
Person. For the purposes of this definition, “control” (including, with correlative
meanings, the terms “controlling,” “controlled by”
and “under common control with”), as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities, by contract or
otherwise.

 

 

 

Section 1.8 “Agreement” has the meaning set forth in the preamble to this Agreement.

Section 1.9 “Annual Plan” has the meaning set forth in Section 4.5(a).

Section 1.10 “Business Days” means a day other than Saturday, Sunday or any day on
which commercial banks located in the State of California or the State of Ohio are authorized or
obligated by Legal Requirements to close.

Section 1.11 “cGMP” means current “Good Manufacturing Practices” as such term is
defined from time to time by the FDA or other relevant Governmental Authority having jurisdiction
over the manufacture or sale of a Product pursuant to its regulations, guidelines or otherwise.

Section 1.12 “Co-Chairs” has the meaning set forth in Section 3.2.

Section 1.13 “Confidentiality Agreement” means that certain Confidentiality Agreement,
dated as of October 10, 2006, between Somaxon and Partner.

Section 1.14 “Control” or “Controlled” means, with respect to patents,
know-how or other intellectual property rights of any kind, the possession by a party of the
ability to grant a license or sublicense of such rights without the payment of additional
consideration and without violating the terms of any agreement or arrangement between such party
and any Third Party.

Section 1.15 “DDMAC” means the FDA’s Division of Drug Marketing, Advertising and
Communications, or any successor Governmental Authority performing comparable functions in the
Territory.

Section 1.16 “Detail” means an in-person, face-to-face sales presentation of a Product
made by a Sales Representative to a Professional, including a Primary Detail.

Section 1.17 “Effective Date” has the meaning set forth in the preamble to this Agreement.

Section 1.18 “Evaluation Period” has the meaning set forth in Section 13.1.

Section 1.19 “Executive Officers” means the Chief Executive Officer of Somaxon (or, if
there is no such officer, its President or other executive officer designated by the Chief
Executive Officer) and the General Manager, Global Customer Business Development, Health &
Well-Being of Partner (or, if there is no such officer, the manager directly managing Partner’s
Sales Force).

Section 1.20 “FDA” means the United States Food and Drug Administration or any
successor agency performing comparable functions in the Territory.

Section 1.21 “Final Quarter” means the period commencing on the first day following
the last full calendar quarter during the Term and ending on the last day of the Term.

Section 1.22 “Force Majeure Event” has the meaning set forth in Section 16.7(a).

Section 1.23 “GAAP” means generally accepted accounting principles as applied in the
United States.

Section 1.24 “Generic Drug Act” has the meaning set forth in Section 9.1(g).

 

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Section 1.25 “Governmental Authority” means any court, agency, authority, department,
regulatory body or other instrumentality of any government or country or of any national, federal,
state, provincial, regional, county, city or other political subdivision of any such government or
any supranational organization of which any such country is a member, which has competent and
binding authority to decide, mandate, regulate, enforce, or otherwise control the activities of the
parties contemplated by this Agreement.

Section 1.26 “Indemnified Persons” has the meaning set forth in Section 11.1.

Section 1.27 “Initial Quarter” means the period commencing on the Promotion
Commencement Date through the day preceding the first day of the subsequent calendar quarter.

Section 1.28 “JCC” has the meaning set forth in Section 3.1.

Section 1.29 “Launch Plan” means the plan and schedule for the commercial launch of
the Products in the Territory during the Initial Quarter, including the parties’ responsibilities
for the activities associated with such commercial launch of the Products and a budget for the
activities to be undertaken in connection with such commercial launch.

Section 1.30 “Legal Requirements” means laws, rules and regulations of any
Governmental Authority in the Territory, including, for clarity, all guidelines, policies and
procedures referenced in Section 5.3 of this Agreement.

Section 1.31 “Managed Care Support” means Promoting the Products to managed care
customers agreed upon by the JCC to support addition of the Products to a managed care plan
formulary.

Section 1.32 “Minimum Detailing Obligations” has the meaning set forth in Section
4.1(b).

Section 1.33 “NDA” means any “new drug application” (as such term is used
under the Act) filed or acquired by Somaxon or any Affiliate with the FDA with respect to a Product
and all subsequent submissions, supplements and amendments thereto, including NDA No. 22-036 filed
with FDA on January 31, 2008 (as such NDA may be amended or supplemented subsequent to the filing
date).

Section 1.34 “Negotiation Period” has the meaning set forth in Section 13.1.

Section 1.35 “Net Sales” means, for a particular period, the gross amount invoiced on
sales of Product in the Territory recognized as gross revenue in accordance with GAAP by Somaxon,
its Affiliates, licensees, sublicensees and assigns to independent, unrelated Third Parties during
such period in bona fide arms’ length transactions, less deductions calculated to arrive at net
sales in accordance with GAAP, including the following: (a) freight, insurance (but only insurance
with respect to shipping the Product), and other transportation charges to the extent added to the
sales price and set forth separately as such on the total amount invoiced; (b) any sales, use,
value-added, excise taxes or duties or allowances on the selling price of Product to the extent
added to the sales price and set forth separately as such on the
total amount invoiced; (c) chargebacks, trade, quantity and cash discounts and rebates to the
extent customary in the trade, including governmental rebates (for the avoidance of doubt,
discounts given to wholesalers, retailers or other distributors of the Product as a fee for
services shall be considered a “cash discount” for this purpose); (d) allowances or credits,
including allowances or credits to customers on account of rejection, defects or returns of the
Product, or because of a retroactive price reduction; and (e) redemption costs associated with any
Product voucher, coupon, loyalty card or other co-pay assistance programs. Net Sales shall not
include a sale or transfer of Product to an Affiliate, licensee, sublicensee or assign of Partner
or Somaxon; but the resale by such Affiliate, licensee, sublicensee or assign of Partner or Somaxon
to a Third Party shall be considered a sale of such Product. Net Sales shall also not include a
transfer of Product if done for clinical, regulatory or governmental purposes where no
consideration is received. For purposes of clarity, it is the intent of the parties that “Net
Sales” for the purposes of this Agreement shall be consistent with the GAAP net sales reported by
Somaxon in its periodic reports with the U.S. Securities and Exchange Commission.

 

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Section 1.36 “Order” means any award, decision, injunction, judgment, decree, order,
ruling, or verdict entered, issued, made, or rendered by any Governmental Authority or by any
arbitrator.

Section 1.37 “OTC Product” has the meaning set forth in Section 13.1.

Section 1.38 “OTC Product Rights” has the meaning set forth in Section 13.1.

Section 1.39 “Partner” has the meaning set forth in the Preamble to this Agreement.

Section 1.40 “Partner Promotion Expenses” means the following costs and expenses
incurred or accrued by Partner for Promoting the Products with respect to the Products in the
Territory: (a) all of the fully-allocated costs and expenses of the Partner Sales Force, (b) all
out-of-pocket costs and expenses for Sample shipment, warehousing and distribution once Samples are
delivered to Partner pursuant to Section 6.4, (c) all out-of-pocket costs and expenses for training
of the Partner Sales Force, and (d) all other out-of-pocket and internal costs and expenses of
Partner for Promoting the Products in the Territory.

Section 1.41 “Partner Sales Force” means the field force of Sales Representatives
employed by Partner to Promote the Products, including field-based sales force management such as
regional and district sales managers, of sufficient size to meet all of Partner’s obligations under
this Agreement.

Section 1.42 “PDMA” means the Prescription Drug Marketing Act, as amended, and the
rules and regulations promulgated thereunder.

Section 1.43 “Person” means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint venture, estate,
trust, association, organization, labor union, or other entity or Governmental Authority.

Section 1.44 “Pharmacist” means a Person who is permitted by law to dispense Products
prescribed by Professionals and to provide information to patients about their side effects and
use.

Section 1.45 “Pharmacist Call” means an in-person, face-to-face discussion of a
Product, including stocking of the Product, made by a Sales Representative to a Pharmacist.

Section 1.46 “Prescriber Data” means data provided by a Third Party which measures
prescriptions filled for Products (by individual prescriber) in the Territory during a specified
time period, from a source mutually agreed in writing by the parties (it being understood that each
of IMS Health Incorporated and Wolters Kluwer is a source agreeable to the parties).

Section 1.47 “Primary Detail” means a Detail to a Professional in which the
promotional message involving a Product is presented in the first position and is the principal
topic of discussion during the contact (defined for this purpose as at least 70% of the time spent
with the Professional in the Detail), with either no additional product presented in the second
position or solely one or more over-the-counter products presented in the second position.

Section 1.48 “Product” or “Products” means the 3mg Product and the 6mg
Product.

 

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Section 1.49 “Product Complaint” means any report concerning the quality, purity,
quantity, weight, pharmacologic activity, labeling, identity or appearance of a Product.

Section 1.50 “Professional” means a physician, prescribing nurse practitioner,
prescribing physician’s assistant or other health care practitioner who is permitted by law to
prescribe Products.

Section 1.51 “Promote,” “Promotional” and “Promotion” mean, with
respect to a Product, any activities undertaken to encourage sales or use of such Product,
including Details, Pharmacist Calls, product sampling, detail aids, coupons and discount cards.

Section 1.52 “Promoted Product” has the meaning set forth in Section 10.1.

Section 1.53 “Promotion Commencement Date” has the meaning set forth in Section 4.1(d).

Section 1.54 “Promotion Fees” has the meaning set forth in Section 7.1(a).

Section 1.55 “Promotional Materials” has the meaning set forth in Section 4.4(a).

Section 1.56 “Proprietary Information” means any proprietary or confidential
information communicated from one party to the other in connection or relating to this Agreement,
which is identified as confidential or proprietary, or which the other party knows or has reason to
know is confidential or proprietary, including the Technology and financial, marketing, business,
technical and scientific information or data, information related to Partner’s or Somaxon’s
compensation of its Sales Representatives, information contained within the Annual Plan and Launch
Plan, and the information described in Section 4.6, whether communicated in writing, orally or
electronically. Proprietary Information shall not include information that the receiving party can
show through written documentation:

	 	(a)	 	at the time of disclosure, is publicly known;
	 
	 	(b)	 	after the time of disclosure, becomes part of the public domain, except
by breach of an agreement between the disclosing party or any Affiliate thereof and
the receiving party or any Affiliate thereof;
	 
	 	(c)	 	is or was in the possession of the receiving party or any Affiliate
thereof at the time of disclosure by the disclosing party and was not acquired
directly or indirectly from the
disclosing party or any Affiliate thereof or from any other party under an agreement
of confidentiality to the disclosing party or any Affiliate thereof; and
	 
	 	(d)	 	is or was developed by the receiving party or its Affiliates without
use of or reference to the other party’s Proprietary Information.

Section 1.57 “Quarter” means the Initial Quarter, each successive calendar quarter
during the Term after the Initial Quarter and the Final Quarter.

Section 1.58 “Quarterly Status Report” has the meaning set forth in Section 4.6.

Section 1.59 “Regulatory Approval” means any and all consents or other authorizations
or approvals required from a Governmental Authority to market and sell a Product in the Territory,
but excluding any form of reimbursement approval.

 

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Section 1.60 “Sales Representatives” means sales representatives employed by Partner
or Somaxon, or a Third Party engaged by Somaxon, to Detail the Products, who have been trained and
equipped to Detail the Products.

Section 1.61 “Samples” has the meaning set forth in Section 6.4(a).

Section 1.62 “Serious Adverse Drug Experience” means any Adverse Drug Experience,
including those subject to expedited reporting as defined in the regulations cited below, that is
fatal or life-threatening, requires hospitalization or prolongation of existing hospitalization,
results in persistent or significant disability or incapacity, is a congenital anomaly/birth
defect, or is of comparable medical significance or any other event which would constitute a
“serious” Adverse Drug Experience pursuant to the terms of 21 C.F.R. 314.80 or 312.32.

Section 1.63 “Serious Adverse Drug Experience Report” means any Adverse Drug
Experience Report that involves a Serious Adverse Drug Experience.

Section 1.64 “Somaxon” has the meaning set forth in the preamble to this Agreement.

Section 1.65 “Somaxon Sales Force” means the field force of Sales Representatives
employed by (a) Somaxon or (b) a Third Party engaged by Somaxon to promote Product.

Section 1.66 “Somaxon Trademarks” means (a) Silenor® and (b)
Somaxon®, and, in each case, all related domain names and other trademark related
rights. The Somaxon Trademarks are attached hereto as Schedule 1.66.

Section 1.67 “Subcontracting” means subcontracting or sublicensing a party’s rights or
obligations hereunder (a) pursuant to which a Third Party will manufacture the Products; or (b)
pursuant to which a Third Party Sales Representative is engaged to Promote the Products.
“Subcontractor” means the Third Party with whom the Subcontracting agreement is entered
into.

Section 1.68 “Targeted Professionals” means Professionals that are the primary care
physicians and other agreed-to target prescribers to which the Partner Sales Force provides
Details. The initial list of Targeted Professionals has been mutually agreed by the parties in
writing, and such list may be amended from time to time by the mutual agreement of the parties
through the JCC.

Section 1.69 “Technology” means all pharmacological, toxicological, preclinical,
clinical, technical or other information, data and analysis and know-how relating to the
registration, manufacture, packaging, use, marketing or sale of a Product and all proprietary
rights relating thereto owned by Somaxon or its Affiliates or to which Somaxon or its Affiliates
has rights so as to be able to license.

Section 1.70 “Term” has the meaning set forth in Section 8.1.

Section 1.71 “Territory” means the United States, including its territories and
possessions and Puerto Rico.

Section 1.72 “Third Party” means any Person other than Partner or Somaxon or their
respective Affiliates.

Section 1.73 “U.S. Securities and Exchange Commission” means the United States
Securities and Exchange Commission, or any successor regulatory body.

 

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Section 1.74 “United States Bankruptcy Code” means the U.S. Bankruptcy Code, 11 U.S.C.
§§ 101, et seq.

Section 1.75 “Volume Forecast” means a written forecast by month of the number of
units of Product expected to be prescribed in the Territory during each calendar year of the Term,
together with the Net Sales expected to correspond to such prescription volume, which forecast
shall be prepared by Somaxon in good faith.

ARTICLE II

GRANT

Section 2.1 Grant of Promotion Rights

During the Term, subject to the terms and conditions of this Agreement, Somaxon hereby grants
to Partner and its Affiliates, and Partner and its Affiliates hereby accept, the right (together
with Somaxon and its Affiliates) to Promote the Products under the Somaxon Trademarks in the
Territory to Targeted Professionals and Pharmacists, on the terms and subject to the conditions set
forth herein.

Section 2.2 Sublicense

Except pursuant to Section 16.9, Partner shall not assign, subcontract or otherwise transfer
or delegate any of its rights or obligations under this Agreement without the express written
consent of Somaxon, which consent may be withheld by Somaxon in its sole discretion.

Section 2.3 Limitation on Competitive Products

Except as expressly contemplated by this Agreement (including Article XIII hereof) and subject
to Section 13.1 hereof, during the Term and for one year thereafter, (a) Partner Sales Force shall
not commercially offer for sale, promote, market or distribute any prescription pharmaceutical
product in the Territory indicated for the treatment of insomnia to Professionals, other than the
Products, and (b) Partner Sales Force shall not detail any over-the-counter product in the
Territory indicated for the treatment of insomnia in the Territory to Professionals.
Notwithstanding the foregoing and for the avoidance of doubt,
Partner is not precluded from commercially offering for sale, promoting, marketing or
distributing to pharmacists, retailers or distributors any over-the-counter product that is
indicated for the treatment of insomnia. In addition, in the event that Partner acquires or is
acquired by a Third Party with a pharmaceutical product in the Territory indicated for the
treatment of insomnia (the “Acquired Product”), Partner shall ensure that such Acquired
Product is not promoted, marketed or Detailed by the Partner Sales Force Detailing the Products and
that there is no overlap between sales managers or trainers for such Partner Sales Force.

Section 2.4 Retention of Rights

Somaxon retains and shall retain all proprietary and property interests in the Products until
the point of sale or, in the case of Samples, until delivered to Partner as contemplated by Section
6.4. Partner will not have nor represent that it has any control or proprietary or property
interests in the Products, except for the licenses and rights specifically granted hereunder.
Except as expressly set forth herein, nothing contained herein shall be deemed to grant Partner, by
implication, a license or other right or interest in any patent, trademark or other similar
property of Somaxon or its Affiliates, except as may be necessary for Partner to Promote the
Products pursuant to this Agreement. For the avoidance of doubt and notwithstanding anything to
the contrary contained herein, Somaxon reserves the right to enter into separate agreements with
Third Parties relating to the Promotion of Silenor to Professionals.

 

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ARTICLE III

JOINT COMMERCIALIZATION COMMITTEE

Section 3.1 Establishment

The parties agree to establish, for the purposes specified herein, a Joint Commercialization
Committee (the “JCC”). The parties acknowledge and agree that the JCC does not have the
power to amend, modify or waive any of the terms or conditions of this Agreement.

Section 3.2 Joint Commercialization Committee

The JCC shall be established by the parties and shall be comprised of four (4) members, two
(2) of whom shall be appointed by Somaxon and two (2) of whom shall be appointed by Partner. Each
party has indicated to the other its initial appointments to the JCC. A party may change any of
its representatives at any time if a new person is appointed to any of the foregoing positions by
giving written notice to the other party. The total number of JCC members may be changed by
unanimous vote of the JCC from time to time as appropriate; provided, that the JCC shall in all
cases be comprised of an equal number of members from each of Somaxon and Partner. Partner and
Somaxon each will designate one representative of such party to serve as co-chairs of the JCC (the
“Co-Chairs”), as well as another representative of such party to serve as the day-to-day
point of contact for the other party relating to the collaboration. The members appointed to the
JCC by each party shall be employees of such party and shall be vested with appropriate
decision-making authority and power by such party. In the event that Somaxon enters into an
agreement with a Third Party relating to the Promotion of Silenor, representatives of such Third
Party shall be permitted to attend meetings of the JCC as non-voting participants, subject to
reasonable agreements relating to Proprietary Information.

Section 3.3 JCC Responsibilities

Except as otherwise set forth herein, the JCC shall provide strategic oversight of all
Promotional activities for the Products hereunder. The responsibilities of the JCC shall be
exercised consistent with this Agreement and shall include, but shall not be limited to:

	 	(a)	 	reviewing the Annual Plan as contemplated by Section 4.5(a);
	 
	 	(b)	 	monitoring the call plans of the Partner Sales Force (including Details
to Professionals and Pharmacist Calls) and the list of Targeted Professionals for
coordination with the call plans of the Somaxon Sales Force and the Professionals
and Pharmacists to be targeted by or on behalf of Somaxon, and
	 
	 	(c)	 	approving any amendments to the list of Targeted Professionals,
including any such amendments included within the Annual Plan;
	 
	 	(d)	 	monitoring the Managed Care Support to be provided by Partner as
contemplated by Section 4.1(e);
	 
	 	(e)	 	reviewing the Volume Forecast and reviewing any Sample forecasts
	 
	 	(f)	 	directing any activities of the parties as a result of deviations from
the Launch Plan or the Annual Plan, or to adjust Promotional activities based on
facts and circumstances (subject to Section 4.5(a)); and
	 
	 	(g)	 	such other functions as may be mutually agreed upon by the parties from
time to time.

 

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For the avoidance of doubt, (i) the JCC shall not have any review or approval rights with respect
to any matters relating to development of the Products, (ii) any decisions of the JCC with respect
to matters which relate to Regulatory Approval for a Product shall require Somaxon’s prior written
consent, which may be given or withheld in its sole discretion, (iii) except as expressly stated in
this Agreement, “reviewing” as set forth above shall not imply any approval right or other
decision-making power on the part of the JCC; and (iv) in no event shall the JCC have the right to
modify or amend this Agreement, or waive either party’s compliance with this Agreement.

Section 3.4 Meetings of the JCC.

Meetings of the JCC may be called by the Co-Chairs of the JCC from time to time and, upon no
less than ten (10) days’ notice, shall otherwise be called when requested by a party; provided,
however, that meetings of the JCC shall be held monthly through December 31, 2010, and on at least
a quarterly basis thereafter during the Term. If possible, the meetings shall be held in person or
where appropriate, by video or telephone conference. Unless otherwise agreed, the location of any
in-person meetings of the JCC shall be the corporate offices of Somaxon and Partner to be
alternated between the Parties on an equal number of meetings basis. The parties shall determine
the form of the meetings. Subject to Section 3.5, decisions shall be made unanimously, each party
having one (1) vote regardless of the number of representatives present or voting; provided, that
no such vote shall be valid unless each party is represented by at least two (2) members either by
written proxy or actual presence at the meeting at which the vote is taken. Subject to appropriate
confidentiality undertakings where applicable, each party shall have the right, upon written notice
to the other party, to have present at JCC meetings additional, non-voting participants (not to
exceed five (5) such participants at any JCC meeting without the consent of the
other party, not including Third Party attendees as described under Section 3.2). Such
additional participants shall not be deemed to be, or have any rights or responsibilities of, a
member of the JCC. The parties shall cause their respective representatives on the JCC to use their
reasonable efforts to resolve all matters presented to them as expeditiously as possible. The party
hosting any meeting shall propose the agenda for the meeting and appoint a secretary to the meeting
who shall record the minutes of the meeting. Such minutes shall be circulated to the parties
promptly following the meeting for review and comment and for unanimous ratification by both
parties. Each party shall bear its own travel and related costs incurred in connection with
participation in the JCC.

Section 3.5 JCC Disputes

(a) In the event that the JCC is, after a period of ten (10) days, unable to make a decision
due to a lack of required unanimity, either party may submit the matter being considered to the
Executive Officers for a joint decision. In such event, either Co-Chair of the JCC, by written
notice to the other party, shall formally request the dispute be resolved by the Executive
Officers, specifying the nature of the dispute with sufficient detail to permit adequate
consideration by the Executive Officers. The Executive Officers shall diligently and in good faith
attempt to resolve the referred dispute expeditiously and, in any event, within fifteen (15) days
of receiving such written notification.

(b) In the event that the Executive Officers are unable to reach a resolution of any referred
dispute after good faith negotiations during the fifteen (15)-day period referred to in Section
3.5(a) above, then Somaxon shall have the final decision-making authority with respect to such
dispute, unless such dispute relates specifically to the direction of the individuals included in
the Partner Sales Force, Managed Care Support or Partner’s Promotion to Targeted Professionals and
Pharmacists hereunder, in which case Partner shall have the final decision-making authority.
Notwithstanding the foregoing, without Partner’s written consent, no dispute resolution shall
require Partner to provide a number of Details or Pharmacist Calls in excess of those set forth in
Section 4.1.

 

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ARTICLE IV

PRODUCT PROMOTION

Section 4.1 Product Promotion 

(a) Subject to applicable Legal Requirements, as well as the provisions of this Agreement,
Partner shall, from and after the Promotion Commencement Date, at its sole expense, maintain the
Partner Sales Force and use commercially reasonable efforts to Promote the Products within the
Territory to Targeted Professionals and Pharmacists in accordance with the Launch Plan and Annual
Plan. For purposes of the preceding sentence, Partner’s commercially reasonable efforts shall be
met if Partner is in compliance with its obligations under this Section 4.1. Partner will cause
the Partner Sales Force and Partner employees and agents acting on Partner’s behalf to comply with
this Agreement and all applicable Legal Requirements in connection with the Promotion of the
Products. It is understood, and (i) Partner agrees that it will be responsible for the acts or
omissions of the Partner Sales Force and its employees and agents to the extent such acts or
omissions fail to comply with Partner’s obligations under this Agreement or constitute negligence
or willful misconduct, including losses arising out of or resulting from any claims, actions,
suits, proceedings, hearings, investigations or demands of Third Parties relating to such acts or
omissions, and (ii) Somaxon agrees that it will be responsible for the acts or omissions of the
Somaxon Sales Force and its employees and agents to the extent such acts or omissions fail to
comply with Somaxon’s obligations under this Agreement or constitute negligence or willful
misconduct,
including losses arising out of or resulting from any claims, actions, suits, proceedings,
hearings, investigations or demands of Third Parties relating to such acts or omissions.

(b) From the Promotion Commencement Date and through the end of the Term, the Partner Sales
Force shall perform a minimum of *** Primary
Details per Quarter
(prorated by Business Days for any partial Quarter) to Targeted Professionals, (the “Minimum
Detailing Obligations”). The Partner’s internal call reporting system shall be used to
determine the Details, including Primary Details, delivered. Subsequent call reports may also
provide updates to previously submitted call reports where reporting was delayed. The right to
audit reports submitted to Somaxon for this activity is set forth in Section 7.2(b). For purposes
of determining Primary Details hereunder, each Product shall be deemed to be the same Product and
shall be counted only once.

(c) Subject to any proration by Business Days for a partial twelve (12)-calendar month period,
Partner shall also perform a minimum of *** Pharmacist Calls during the first full
twelve (12) calendar months of the Term, and a minimum of *** Pharmacist Calls during
each twelve (12) calendar-month period thereafter.

(d) Partner shall commence (the date of such commencement, the “Promotion Commencement
Date”) Promotion (including Details and Pharmacist Calls by the Partner Sales Force) of the
Products in accordance with this Agreement and the performance of the other obligations contained
herein that are required to be performed from and after the Promotion Commencement Date as soon as
practicable following the date hereof, but no later than September 20, 2010. The parties agree to
cooperate with each other in good faith in furtherance of the preceding sentence.

 

	 	 	 
	***	 	Certain information on this page has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

 

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(e) Beginning as of January 1, 2011, Partner’s team of ten (10) sales managers will provide
Managed Care Support. Somaxon will have the exclusive right and responsibility to negotiate and
contract with managed care plans and have complete control of all matters related to drug pricing,
including rebates and discount rates. The Managed Care Support will be agreed by the Parties at a
JCC meeting sufficiently in advance so that it may be included in the 2011 Annual Plan. The
Managed Care Support shall be subject to the direction of Somaxon and shall not encompass greater
than *** of Partner’s team of ten (10) sales managers’ annual business hours. For
purposes of clarity, all such contracts and arrangements supported by Partner must be executed and
administered by Somaxon.

(f) For the avoidance of doubt, the obligations of Partner as set forth in this Section 4.1
shall unless otherwise agreed be suspended for any period of time during which Somaxon is unable
to: (i) supply at least seventy-five percent (75%) of the aggregate amount of Samples and trade
Product specified in the then-current Volume Forecast, or (ii) maintain the continued effectiveness
of the Regulatory Approvals.

(g) Commencing as of the Effective Date and continuing throughout the Term, Somaxon shall use
commercially reasonable efforts to Promote the Product in the Territory in accordance with the
Launch Plan and the Annual Plan. Somaxon shall be responsible for directing Promotional
activities for the Product. The exact number, targeting and frequency of Details to be provided by
Somaxon will be set forth in the Launch Plan and the Annual Plan.

Section 4.2 Representations to Customers

Neither party will make any false or misleading representations to Professionals, Pharmacists,
managed care representatives, customers or others regarding the other party or the Products, and
neither party will make any representations, warranties or guarantees with respect to the
specifications, features or capabilities of the Products that are not consistent with the
applicable then-current FDA approved labeling and package insert (except to the extent permitted by
Legal Requirements). Partner agrees to undertake timely and complete corrective action for any
deviations on its part from this Section 4.2, subject to discussion and review by Somaxon’s legal,
regulatory affairs and quality assurance departments. For the sake of clarity, Somaxon shall be
solely responsible for all statements and information in Promotional Materials and in the training
materials provided by Somaxon, and Partner shall bear no liability for representations consistent
with such Promotional Materials and training materials.

Section 4.3 Staffing; Training

(a) Except as agreed by the parties herein, Partner shall be solely responsible for the costs
and expenses of establishing, maintaining and training the Partner Sales Force, and conducting
Partner’s other activities under this Agreement; provided, however, that (i) such Product training
shall be conducted in accordance with Section 4.3(b) and (ii) the content and strategic direction
of any Product training provided by Partner that relates specifically to the Product shall be
overseen by the JCC.

(b) Somaxon shall prepare and make available to Partner reasonable quantities of any training
materials created by Somaxon, at Somaxon’s expense, and shall be delivered to a single location
specified by Partner in writing prior to such delivery, at Somaxon’s expense. Each of the parties
agrees to make its Sales Representatives available for initial Product training with respect to the
marketing and sale of the Product. Somaxon shall be responsible for developing and, if applicable,
conducting future Product training programs for each of the Partner Sales Force and the Somaxon
Sales Force, and each member of the Partner Sales Force and the Somaxon Sales Force shall be
qualified using such programs and Somaxon’s training assessment tools. The expenses of attendance
at and participation in all of such training by Partner’s Sales Representatives and other Partner
personnel shall be borne entirely by Partner. Partner will be responsible for selecting and
establishing the training venue and methods, with the parties to mutually agree on the initial
training schedule in support of the Launch Plan. Partner shall train the Partner Sales Force, at
its expense, and Somaxon shall train the Somaxon Sales Force, at its expense, with respect to
compliance with applicable Legal Requirements prior to engaging in Promotion of the Products. As
between the parties hereto and except as expressly provided otherwise elsewhere in this Agreement,
Somaxon shall own all right, title and interest in Product training materials developed hereunder.

 

	 	 	 
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Section 4.4 Promotional Materials; Educational Materials; 

(a) All sales, promotional, advertising, marketing, educational and training materials
(“Promotional Materials”) regardless of form relating to the Product shall be created,
developed, produced or otherwise obtained by or under the direction of Somaxon, at its expense.
Such Promotional
Materials may include, by way of example, detailing aids; leave behind items; journal
advertising; educational programs; formulary binders; appropriate reprints; product monographs;
patient support materials; convention exhibit materials; direct mail; market research survey and
analysis; training materials; and scripts for telemarketing and teleconferences. As between the
parties hereto and except as expressly provided otherwise elsewhere in this Agreement, Somaxon
shall own all right, title and interest in all Promotional Materials.

(b) Promotional Materials will be produced by or at the direction of Somaxon and at its
expense, and Somaxon shall provide Partner with the requisite number of copies of the final printed
Promotional Materials in a timely manner so as to allow Partner to Promote the products pursuant to
the Launch Plan and the Annual Plan. The Promotional Materials supplied to Partner under this
Section 4.4(b) shall be delivered to a single location specified by Partner in writing prior to
such delivery, at Somaxon’s expense. Somaxon hereby grants to Partner the co-exclusive right,
during the Term, to use the Promotional Materials supplied to Partner pursuant to this Section
4.4(b) in the performance of its obligations under this Agreement.

(c) Partner may request to utilize Promotional programs other than the use of its Samples and
Promotional Materials, but any such utilization of such programs is subject to Somaxon’s consent,
which may be withheld at Somaxon’s sole discretion.

Section 4.5 Annual Plan; Promotion Expenses

(a) On or prior to November 10th of the preceding calendar year with respect to
each calendar year during the Term beginning with the 2011 calendar year, Somaxon shall develop an
annual sales and marketing plan (the “Annual Plan”) and submit the Annual Plan to the JCC
for review. The Annual Plan shall set forth the manner in which Somaxon and Partner will be
expected to Promote the Products during the period to which the Annual Plan relates; provided,
however, that the Annual Plan may be modified from time to time as Somaxon reasonably deems
appropriate for the Promotion of the Products; and provided, further, that Annual Plan may not
modify or amend the obligations or rights of a party under this Agreement, or waive either party’s
compliance with this Agreement unless both parties agree otherwise in writing. Any such modified
Annual Plan shall be provided to the JCC for its review at its next regularly scheduled meeting.
The Annual Plan shall include, at a minimum:

(i) the anticipated number of quarterly and annual Details (including Primary Details) to be
provided by the Somaxon Sales Force and the Partner Sales Force, and the Professionals to receive
those Details;

(ii) product positioning, strategy and tactics, with supporting advertising and promotional
activity to be undertaken;

 

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(iii) planned public relations activities, if any;

(iv) training or sampling programs to be conducted;

(v) pricing and contracting strategies;

(vi) managed care strategies and tactics, including the Managed Care Support; and

(vii) a budget for all costs and expenses associated with the activities to be undertaken
pursuant to the Annual Plan.

(b) In addition, on or prior to November 10th of the preceding calendar year with
respect to each calendar year during the Term beginning with the 2011 calendar year, Somaxon shall
provide the following information to the JCC to assist the JCC in its review of the Annual Plan:
(i) Product manufacturing and distribution forecasts for the coming year, including anticipated
trade inventory for the associated period, and (ii) its proposed Volume Forecast.

(c) The JCC shall use all reasonable efforts to review and provide comments to the Annual Plan
not later than December 1 of each preceding calendar year. Somaxon will consider in good faith any
comments to the Annual Plan provided by the JCC.

(d) Except as specifically set forth herein, each party will bear its own operating expenses
associated with the Products and Promotion thereof, including all personnel, general and
administrative and overhead costs. Unless otherwise agreed in writing by the parties, Partner will
bear all Partner Promotion Expenses, and Somaxon will bear all other expenses relating to the
promotion of the Products.

(e) Somaxon will bear all costs associated with maintaining and continuing all Regulatory
Approvals in the Territory, including all costs associated with Adverse Drug Experience reporting,
filing annual reports in connection with the NDAs, user fees and establishment fees associated with
the NDAs and all clinical and regulatory requirements.

(f) At the end of each Quarter, Somaxon shall at its expense provide directly to Partner,
within ten (10) Business Days of its receipt, a summary of Prescriber Data for such Quarter related
to the Product, to the extent and in such form as is permitted under the applicable Third Party
agreements under which Somaxon purchases the Prescriber Data.

Section 4.6 Status Reports

Within twenty (20) Business Days following the end of each Quarter, each party shall provide
the other party with a status report (the “Quarterly Status Report”), which report will be
reviewed and agreed upon by the JCC as to content and format and delivery vehicle with the intent
of summarizing each party’s Detailing and Pharmacy Call activities pursuant to this Agreement for
such prior Quarter and on a calendar year-to-date basis, including: (a) the number of Primary
Details made and recorded by such party’s standard record keeping procedures; (b) the names and
addresses of the Professionals and Pharmacists called upon; (c) the names of Professionals Detailed
who were provided with Samples, along with all of such other information relating to such Sampling
activity as are required for compliance with PDMA; (d) the average number of such Samples delivered
on each Detail; and (e) such other information as may be agreed upon in writing by the parties.

 

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Section 4.7 Trademarks

(a) Somaxon hereby grants to Partner a non-exclusive, royalty-free right and license (subject
to Section 16.9, such license to be non-assignable and non-sublicensable without Somaxon’s written
consent) to use the Somaxon Trademarks in the Territory solely in connection with Partner’s
Promotion of the Products in accordance with this Agreement. Such license shall expire immediately
upon the expiration or termination of this Agreement. Partner recognizes Somaxon’s title to the
Somaxon
Trademarks, and shall not at any time, during or after the Term, do or knowingly suffer to be
done any act or thing which will in any way impair the rights of Somaxon in or to the Somaxon
Trademarks. Partner acknowledges and agrees that it shall not acquire and shall not claim any title
to the Somaxon Trademarks adverse to Somaxon by virtue of the rights granted under this Agreement
or through Partner’s use of the Somaxon Trademarks, it being the intention of the parties that all
goodwill and improved reputation related to the Trademark generated by Partner shall inure to the
benefit of Somaxon.

(b) Partner will maintain quality standards for all of its uses of the Somaxon Trademarks in
connection with the Promotion of the Products that are consistent with Somaxon’s trademark quality
standards. Subject to the foregoing and to the other provisions of this Agreement, Partner
acknowledges and agrees that Somaxon as the owner of the Somaxon Trademarks has the right, at any
time, to modify or supplement such quality standards and that Partner must implement such new
standards or changes following receipt of notice of such additions or changes; provided that
Somaxon agrees to bear all reasonable costs associated with such modifications and supplements.

Section 4.8 Product Website

Somaxon shall maintain the existing Product website and implement any changes to the website
in its sole discretion.

ARTICLE V

REGULATORY AFFAIRS

Section 5.1 Regulatory Approvals

Somaxon shall use active, sustained, diligent efforts to maintain and continue all Regulatory
Approvals currently in effect for the Products. Partner agrees that all Regulatory Approvals,
applications therefor and any other submissions to a Governmental Authority with respect to the
Products shall be in the name of, and shall be owned by, Somaxon or its designee.

Section 5.2 Compliance with Regulatory Requirements

Unless otherwise required by law or expressly required by this Agreement, Somaxon will retain
exclusive authority over and responsibility for complying with all regulatory requirements and
maintaining all contacts with Governmental Authorities with respect to the Products, including
maintaining and updating of the NDA, the development and submission of applications for new
formulations, dosage strengths or indications of the Products, the reporting of any Adverse Drug
Experiences to the FDA, the compliance of Promotional Materials with FDA rules and regulations and
the filing of Promotional Materials with the FDA.

 

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Section 5.3 Compliance

In performing its duties hereunder, each party shall, and shall cause the Partner Sales Force
or Somaxon Sales Force, as applicable, and its employees and agents to, comply with all Legal
Requirements, including the FDA’s regulations and guidelines concerning the advertising of
prescription drug products, DDMAC’s promotional guidelines, the PhRMA Code on Interactions with
Healthcare Providers, the PDMA, equal employment, non-discrimination and federal and state
anti-kickback Legal Requirements, and Legal Requirements with respect to submission of false claims
to governmental or
private health care payors, which may be applicable to the activities (including the
warehousing, handling and distribution of Samples) to be performed by such party hereunder. None of
Partner, Somaxon, the Partner Sales Force, the Somaxon Sales Force and either party’s employees and
agents shall offer, pay, solicit or receive any remuneration to or from Professionals in order to
induce referrals of or purchase of the Products in violation of applicable Legal Requirements,
including without limitation federal or state anti-kickback Legal Requirements.

Section 5.4 Communications with Regulatory Authorities

(a) During the Term, all responses to requests or inquiries of Governmental Authorities and
filings with regulatory bodies concerning the Products shall be the sole responsibility of Somaxon.
Partner shall reasonably assist Somaxon with respect to such requests, inquiries or filings to the
extent deemed necessary by Somaxon and solely with respect to Partner’s activities under this
Agreement, including by providing all information and documentation reasonably requested by Somaxon
in connection therewith as soon as is reasonably practicable. Somaxon shall reimburse Partner for
reasonable expenses and fees for such cooperation, subject to Section 5.7 and except to the extent
that Partner is obligated to provide indemnification relating to such situation pursuant to Section
11.1.

(b) During the Term, Partner shall promptly notify Somaxon of any information Partner receives
regarding any threatened or pending action by any Third Party, regulatory agency or other
Governmental Authority which may affect the Products, including but not limited to any litigation
or governmental investigation. To the extent permitted by law, Partner will provide Somaxon with
copies of all documents received by Partner relating to any of the foregoing. Partner shall, at
the request of Somaxon, reasonably cooperate with Somaxon in taking appropriate action. In no
event shall Partner itself respond to any such third party, regulatory agency or other Governmental
Authority action without the prior written consent of Somaxon unless compelled to do so by law. To
the extent permitted by law (including but not limited to all relevant data protection laws),
copies of all documents to be provided to such third party, regulatory agency or Governmental
Authority will be provided to Somaxon in advance, if practicable, or otherwise as soon as is
reasonably practicable after delivery to such Third Party, regulatory agency or Governmental
Authority. Somaxon shall reimburse Partner for reasonable expenses and fees for such cooperation,
subject to Section 5.7 and except to the extent that Partner is obligated to provide
indemnification relating to such situation pursuant to Section 11.1.

(c) During the Term, Somaxon shall promptly notify Partner of any information Somaxon receives
regarding any threatened or pending action by any Third Party, regulatory agency or other
Governmental Authority with respect to Partner’s activities under this Agreement, including but not
limited to any litigation or governmental investigation. To the extent permitted by law, Somaxon
will provide Partner with copies of all documents received by Somaxon relating to any of the
foregoing. Somaxon shall, at the request of Partner, reasonably cooperate with Partner in taking
appropriate action. Partner shall reimburse Somaxon for reasonable expenses and fees for such
cooperation, subject to Section 5.7 and except to the extent that Partner is obligated to provide
indemnification relating to such situation pursuant to Section 11.1.

 

15

 

Section 5.5 Product Complaints

Partner shall notify Somaxon’s Medical Affairs department or its designee of any Product
Complaint within two (2) Business Days of Partner becoming aware of such Product Complaint.
Partner shall provide reasonable assistance, as it relates to Partner’s rights under this
Agreement, to Somaxon to
investigate any Product Complaint and any suspected or actual failure of Product that results
in a recall, withdrawal or field correction; provided, however, that all decisions made with
respect to the handling of any such situation shall be in Somaxon’s reasonable discretion; and,
provided further, that Somaxon shall reimburse Partner for reasonable expenses and fees for such
assistance, subject to Section 5.7 and except to the extent that Partner is obligated to provide
indemnification relating to such situation pursuant to Section 11.1. Except to the extent required
by applicable law, Partner shall not make any statement to any Professional or any other Third
Party that could reasonably be construed as an admission of fault on Somaxon’s part or a promise
that Somaxon will compensate anyone with respect to any Product Complaint.

Section 5.6 Adverse Drug Experiences

To the extent that Partner becomes aware of any information relating to the use of any Product
that may constitute an Adverse Drug Experience (as such term is defined in 21 CFR 310.305 and 21
CFR 314.80, or any replacements therefore), Partner shall collect and report such information to
Somaxon’s Global Safety Surveillance Department or its designee, within one (1) business day after
becoming aware of such information. As between Somaxon and Partner, Somaxon will be solely
responsible for reporting Adverse Drug Experiences for Products to the FDA and any other applicable
regulatory authority in accordance with all applicable Legal Requirements. Except to the extent
required by applicable Legal Requirements, Partner shall not make any statement to any Professional
or any other Third Party that could reasonably be construed as an admission of fault on Somaxon’s
part or a promise that Somaxon will compensate anyone with respect to any Adverse Drug Experience.

Section 5.7 Recalls or Other Corrective Action

To the extent permitted or required by any Legal Requirement, as between the parties, any
decision to recall, withdraw, conduct a field correction or cease distribution of any Product as a
result of a violation of any Legal Requirement, or because the Product presents a possible safety
risk or otherwise, shall be made by Somaxon. Somaxon will notify Partner of all such actions
relating to any Product initiated by Somaxon or required by the FDA or any other applicable
regulatory body so as to enable Partner to provide Somaxon with any assistance in connection with
such action as may reasonably be requested by Somaxon. In the event that such action is required
by the FDA or any other applicable regulatory body, or if any such action is deemed advisable by
Somaxon in its sole discretion, such action shall be implemented and administered in a manner which
is appropriate and reasonable under the circumstances and in conformity with any requests or orders
of the applicable regulatory body, as well as accepted trade practices and all Legal Requirements.
The reasonable costs and expenses in connection with such action shall be paid by Somaxon, unless
such action is due solely to (i) the failure by Partner or its employees or agents to comply with
any Legal Requirement or (ii) the negligent or intentional wrongful act or omission of Partner or
its employees or agents, in which case the cost and expenses of such action shall be paid by
Partner. Somaxon shall handle exclusively the organization and implementation of all such actions
relating to Products. In accordance with Legal Requirements, Partner will maintain such
information as may be reasonably required by Somaxon to effect a Product recall, withdrawal or
field correction.

 

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Section 5.8 Medical Inquiries

The parties acknowledge that each may receive comments, requests and inquiries from members of
the medical and paramedical professions and consumers relating to the Products that are not covered
by
Product labeling. All responses to such comments, requests or inquiries from healthcare
providers shall be handled solely by Somaxon or its designee and will be referred by Partner as
such. Partner shall provide reasonable assistance to Somaxon, at Somaxon’s expense, to the extent
deemed necessary by Somaxon to fully respond to such communications. Somaxon or its designee shall
also be responsible for responding to such comments, requests and inquiries that are not received
by Partner, all of which responses shall be in compliance with all applicable Legal Requirements
and the NDA.

Section 5.9 Assistance

Each party agrees to provide to the other all reasonable assistance and take all actions
reasonably requested by the other party that are necessary to enable the other party to comply with
any Legal Requirement applicable to the Products in the Territory. Each party will promptly notify
the other in the event that it becomes aware of any diversion, adulteration, misbranding or
violations of any Legal Requirements concerning the Products.

Section 5.10 Debarment

Neither party shall knowingly engage any Third Party appearing on the FDA’s debarment list or
the list of excluded individuals/entities of the Office of Inspector General of the Department of
Health and Human Services to perform, or assist such party in the performance of, its obligations
under this Agreement, and each party shall review each such list prior to engaging any such Third
Party.

ARTICLE VI

MANUFACTURING AND SUPPLY; SALES; PRICING

Section 6.1 Obligations of Somaxon

In accordance with the provisions of this Agreement and all applicable Legal Requirements,
Somaxon shall, at its cost and expense, use commercially reasonable efforts to perform or cause to
be performed all Product manufacture, labeling, packaging, warehousing, distribution and return,
order entry, customer services and all other activities to supply and distribute the Products in
the Territory in order to fill orders for (a) Product conforming to the then current Volume
Forecast and (b) Partner’s Sample requirements pursuant to Section 6.4. Somaxon shall promptly
inform Partner of any back-order situations or other situations in which wholesaler orders of the
Product have not been filled.

Section 6.2 Manufacturing Activities

The Products, including all Samples, to be manufactured by or for Somaxon for sale in the
Territory shall be manufactured to meet applicable specifications for the Products in accordance
with the NDA, cGMP and in compliance with all other applicable Legal Requirements.

Section 6.3 Sales; Pricing

Somaxon or its Affiliates shall book all sales of the Products in the Territory in accordance
with GAAP, and shall be responsible for entering into any contracts and other arrangements with any
Person regarding the sale of the Products, and for establishing and approving the form, content and
terms and conditions thereof, including any discount, allowance, rebate, chargeback or other term
granted therein.

 

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Section 6.4 Samples

(a) Somaxon shall at its expense (subject to Section 6.4(c)) provide or cause to be provided
to Partner, as properly ordered by Partner hereunder, samples of the Products that are not for sale
and with no fee associated (“Samples”), to be distributed by Partner solely in connection
with the performance of Details or as otherwise required by the rules, guidelines and policies
applicable to any Professional; provided that the number of such Samples to be provided to Partner
shall be consistent with Somaxon’s Third Party Product supply agreements and shall be in no greater
quantities than those included in the then-current Launch Plan or Annual Plan (unless Somaxon
otherwise agrees in writing).

(b) Prior to the Promotion Commencement Date (or such later date as agreed by the parties),
Somaxon shall deliver such quantities of Samples as reasonably required by Partner Sales Force for
the period beginning on the Promotion Commencement Date and ending December 31, 2010, as mutually
agreed by the parties. At least thirty (30) days prior to the beginning of each Quarter ending
after December 31, 2010, Partner shall submit to Somaxon a written, non-binding forecast by month
of the number of units of Samples it requests, on a Product-by-Product basis, for the twelve (12)
month period beginning with such Quarter. Partner will order Samples for its Sales Representatives
from Somaxon on an as-needed basis (but no more frequently than on a monthly basis for any such
Sales Representative), with each such order being approved by each such Sales Representative’s
manager, and also being subject to the approval of Somaxon with respect to the quantity of each
order relative to the Launch Plan or the then-current Annual Plan.

(c) Somaxon shall supply such Samples CIP (Incoterms 2000) to a single destination designated
by Partner prior to shipment of such Samples, and the risk of loss and responsibility for handling
and warehousing of the Samples shall pass to Partner upon delivery to Partner’s designated
destination. Partner shall be responsible for distributing the Samples to its Sales Representatives
in a timely manner. Partner shall also be responsible for securing the return and appropriate
disposal of and reconciling existing Sample inventories from discontinued Partner Sales
Representatives.

(d) Samples supplied by Somaxon to Partner shall be used by Partner solely in performing
Details to Professionals in accordance with this Agreement. Upon its receipt of Samples, Partner
shall be solely responsible for accountability and compliance with the applicable requirements of
the PDMA and relating to samples in the possession of the Partner Sales Force, and other applicable
Legal Requirements relating to such Samples and the distribution of same by the Partner Sales
Force, and shall be responsible for adherence by its Sales Representatives to such Legal
Requirements.

ARTICLE VII

COMPENSATION

Section 7.1 Promotion Fees

(a) In consideration for Partner’s performance of its obligations under this Agreement,
Somaxon shall pay promotion fees (the “Promotion Fees”) to Partner as follows:

(i) *** per Quarter (or prorated payment for any partial Quarter based on the ratio
of actual Business Days during which Details are provided divided by the Business Days in the
Quarter) for Detailing effort to Professionals by the Partner Sales Force;

 

	 	 	 
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(ii) for each Quarter, *** of the Net Sales during such Quarter; and

(iii) for each Quarter after December 31, 2010, *** for the Managed Care Support
(or prorated payment for any partial Quarter based on the ratio of actual Business Days divided by
the Business Days in the Quarter);

provided, however, that if Partner has not met the Minimum Detailing Obligations in any such
Quarter (or portion thereof), then: (A) if Partner has performed at least seventy-five percent
(75%) of such Minimum Detailing Obligations during such Quarter (or portion thereof), the Promotion
Fee specified in subsection (a)(i) above shall be reduced to an amount equal to the percentage of
the Minimum Detailing Obligations that were performed in such Quarter (or portion thereof);
provided further, Partner may cure any shortfall below one hundred percent (100%) of such Minimum
Detailing Obligations one time in each calendar year by performing such shortfall in Details below
the one hundred percent (100%) level in the immediately following Quarter, in which case Somaxon
shall pay to Partner the reduction in the Promotion Fee not previously paid for the prior Quarter;
or (B) if Partner has not performed at least seventy-five percent (75%) of such Minimum Detailing
Obligations during such Quarter (or portion thereof), the Promotion Fee specified in subsection
(a)(i) above shall not be due and payable by Somaxon to Partner; provided further, Partner may cure
any shortfall below seventy-five percent (75%) of such Minimum Detailing Obligations one time in
each calendar year by performing such shortfall in Details below the seventy five percent (75%)
level in the immediately following Quarter, in which case Somaxon shall pay to Partner the
Promotion Fee not previously paid for the prior Quarter. Partner shall not be permitted to cure
any default described under this Section 7.1 (e) until the Quarter ending September 30, 2011 (for
clarity, no cure right shall be available to partner until the Quarter beginning October 1, 2011).

In addition, if Somaxon has not performed at least seventy-five percent (75%) of its Primary
Details as set forth in the applicable Annual Plan for two (2) consecutive Quarters, beginning with
the Quarter ending December 31, 2010, in addition to the Promotion Fee specified in subsection
(a)(ii), Somaxon will pay to Partner an additional *** of the Net Sales during such
consecutive Quarters. If Somaxon thereafter performs at least seventy-five percent (75%) of such
Primary Details, the Promotion Fee specified in subsection (a)(ii) shall revert to the percentage
set forth therein.

(b) No later than (i) thirty (30) days following the receipt by Somaxon of the Quarterly
Status Report from Partner for a Quarter or (ii) forty five (45) days following the end of each
Quarter for which Promotion Fees will be paid pursuant to Section 7.1(a), Somaxon shall provide
Partner with a statement in a mutually agreeable format setting forth the aggregate number of units
of Product (on a Product-by-Product basis) sold to customers in the Territory during such quarter
and Net Sales during such Quarter.

(c) Except as expressly specified otherwise, all payments due under this Agreement shall be
paid no later than (i) thirty (30) days following the receipt by Somaxon of the Quarterly Status
Report from Partner for a Quarter or (ii) forty five (45) days following the end of each Quarter to
which such payments relate, provided that Somaxon has received the Quarterly Status Report from
Partner for such Quarter.

 

	 	 	 
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Section 7.2 Maintenance of Records

(a) Each party agrees to keep, for a period of at least three (3) years after the date of
entry (or such longer period as may be required by Legal Requirements) full and accurate records
maintained in accordance with such party’s accounting practices in sufficient detail to enable a
Third Party to accurately calculate (i) in the case of Somaxon, Net Sales and payments to be made
under this Agreement, and (ii) in the case of Partner, Details, Primary Details and Pharmacist
Calls and Samples distributed by the Partner Sales Force. Upon thirty (30) days prior written
notice, such records shall be made available by the record-keeping party for audit by an
independent certified public accounting firm designated by the other party and reasonably
acceptable to the party whose records are to be examined. The auditor will only examine such books
and records during business hours but not more than once each fiscal year while this Agreement
remains in effect and for three years thereafter in order to verify, as applicable, Net Sales
reported, payments to be made under this Agreement and Details, Primary Details and Pharmacist
Calls completed by the Partner Sales Force. The fees and expenses of the auditor performing such
verification examination shall be borne by the party conducting the verification; provided,
however, that if any verification reveals that the audited party has reported incorrectly, and the
amount of such discrepancy is at least five percent (5%) of the aggregate amount that should have
been reported for the period examined, then the audited party shall pay such fees and expenses.

(b) Each party shall have the right, upon ten (10) Business Days’ prior written notice, to
audit all applicable records of the other party (other than records described in Section 7.2(a))
for the purpose of determining the audited party’s compliance with the obligations set forth in
this Agreement, including with respect to training programs and certifications and records and
reports for the Samples. The audit will be conducted during normal business hours, at convenient
times. Any such audit may be conducted no more than once each 12 month period during the Term. The
fees and expenses of the auditing party shall be borne by such party. This right to audit shall
extend throughout the term of this Agreement and for one year after expiration or termination of
this Agreement.

Section 7.3 Payments

Any payments required to be made by either party under this Agreement shall be made in United
States dollars via wire transfer of immediately available funds to such bank account as the other
party shall designate in writing prior to the date of such payment. All payments shall bear
interest from the date due until paid at three percent (3%) per annum, or, if less, the maximum
rate permitted by applicable law.

ARTICLE VIII

TERM AND TERMINATION

Section 8.1 Term

The term of this Agreement shall commence on the Effective Date and shall continue, unless
terminated sooner in accordance with this Article VIII, until December 31, 2012 (the
“Term”); provided,
however, that beginning as of June 30, 2012, the parties will discuss in good faith the
continuation of the collaboration beyond such Term upon mutually-agreed terms and conditions.

Section 8.2 Early Termination

(a) Somaxon may terminate this Agreement, at any time after providing ninety (90) days’ prior
written notice, in the event that Partner fails to provide at least seventy-five percent (75%) of
its Minimum Detailing Obligations in any Agreement Quarter. Notwithstanding the foregoing, Partner
shall have an opportunity to cure any such breach within the ninety (90) days following written
notice from Somaxon: (i) by making that number of aggregate Primary Details during such 90-day
period as is equal to Partner’s aggregate Minimum Detailing Obligations for such period plus the
number of Primary Details by which Partner failed to meet its Minimum Detailing Obligations during
the Agreement Quarter that was the subject of the notice of breach; and (ii) so long as no other
breach of the Minimum Detailing Obligations has occurred within the prior twelve (12) month period.

 

20

 

(b) Either party may terminate this Agreement for any reason upon ninety (90) days’ prior
written notice; provided, however, that the effective date for such termination may not occur prior
to December 31, 2011. During any such 90-day notice period, the parties will discuss in good faith
the terminating party’s rationale for such termination and the potential to continue the
Promotional activities under revised terms.

(c) Partner may terminate this Agreement immediately upon written notice to Somaxon (i) if the
Product is withdrawn from the market for longer than three (3) months as a result of any Legal
Requirement, or (ii) thirty (30) days after the end of any calendar quarter in which the market
share for Silenor is less than 75% of the Silenor market share immediately prior to the loss of a
Product’s market exclusivity in the Territory (whether through the introduction of a generic
product or otherwise).

(d) Either party may terminate this Agreement immediately upon written notice to the other
party in the event of a large scale recall or withdrawal of the Product from the Territory
resulting from a significant safety risk inherent in the Product and not due to tampering, a
remediable manufacturing problem, or other defect that can be cured with respect to Products
manufactured after such risk is discovered.

Section 8.3 Termination for Cause

Either party may terminate this Agreement, effective at any time after providing sixty (60)
days written notice and an opportunity to cure during such sixty (60)-day period (ninety (90) days
in the case of a breach by Somaxon of Section 6.1), in the event of a material failure of the other
party to comply with its material obligations contained in this Agreement. If such cure is
effected, such notice with respect to such termination shall be null and void.

Section 8.4 Termination for Bankruptcy or Force Majeure

To the extent permitted by law, each party will have the right to terminate this Agreement
immediately upon notice to the other party, in the event of either of the following:

(a) The entry of an order for relief under the United States Bankruptcy Code (or any
corresponding remedy under successor laws) against the other party; the filing of a petition by or
against
the other party under any bankruptcy, insolvency or similar law (which petition is not
dismissed within sixty (60) days after filing), except Chapter 11 of the United States Bankruptcy
Code or any successor statute that permits an organization to continue its operation while
protecting it from creditors; the appointment of a receiver for the other party’s business or
property; or the other party’s making of a general assignment for the benefit of its creditors; or

(b) Any Force Majeure Event affecting the other party beyond the other party’s control which
lasts for a period of at least six (6) months and which is of sufficient intensity to interrupt or
prevent the carrying out of such other party’s material obligations under this Agreement during
such period.

 

21

 

Notwithstanding the occurrence of any of the events specified in subsection (a) of this Section
8.4, the parties acknowledge and agree that, to the extent Section 365(n) of the United States
Bankruptcy Code applies to this Agreement, the non-insolvent party may elect to retain and exercise
the rights granted to it hereunder with respect to the intellectual property owned or controlled by
the insolvent party.

Section 8.5 Effect of Termination

(a) No additional payment obligations arising under Article VII hereof shall accrue after the
date of expiration or termination of this Agreement except as set forth in Section 8.5(d);
provided, however, that expiration or termination of this Agreement shall not relieve either party
of any obligations accruing prior to such expiration or termination. Certain provisions of this
Agreement by their terms continue after the expiration or termination of this Agreement, including
Articles 1, 11, 13 and 16 and Sections 2.3, 4.6 (but only with respect to the Final Quarter), 7.1
(but only with respect to the Final Quarter), 7.2, 8.5 and 12.1, under this Agreement shall also
survive, but only to the extent required for the full observation and performance of this
Agreement.

(b) Expiration or termination of this Agreement shall be without prejudice to (i) any remedies
which any party may then or thereafter have hereunder or at law or in equity; and (ii) a party’s
right to receive any payment accrued under the Agreement prior to the termination date but which
became payable thereafter; and (iii) either party’s right to obtain performance of any obligations
provided for in this Agreement which survive termination by their terms or by a fair interpretation
of this Agreement. Except as expressly set forth herein, the rights to terminate as set forth
herein shall be in addition to all other rights and remedies available under this Agreement, at
law, or in equity or otherwise.

(c) Upon the expiration or termination of this Agreement pursuant to this Article VIII, each
party shall promptly transfer and return to the other party all Proprietary Information of the
other party (provided that each party may keep one copy of such Proprietary Information for
archival purposes only). Upon the expiration or termination of this Agreement, Partner shall, if
requested by Somaxon, provide to Somaxon all Promotional Materials and Samples in Partner’s
possession (including electronic files of all Promotional Materials), as well as all Detail and
Pharmacist Call notes and lists of and contact information for Targeted Professionals, at Somaxon’s
expense unless termination of the Agreement was by Somaxon other than pursuant to Sections 8.2(a),
8.3 or 8.4(a) (in which case such provision of Promotional Materials and Samples will be at
Partner’s expense).

(d) Upon expiration or termination of this Agreement by Somaxon other than pursuant to
Sections 8.2(a), 8.3 or 8.4(a), for each successive three calendar month period (or portion
thereof)
included within the one-year period following such expiration or termination, Somaxon shall
pay to Partner an amount equal to *** the Net Sales for such period (or portion
thereof).

ARTICLE IX

REPRESENTATIONS AND WARRANTIES

Section 9.1 Representations and Warranties of Somaxon

Somaxon hereby represents and warrants to Partner as of the date hereof as follows:

 

	 	 	 
	***	 	Certain information on this page has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

 

22

 

(a) Organization. Somaxon (i) is a corporation duly organized, validly existing and in
good standing under the laws of the state of Delaware, and (ii) has all necessary corporate power
and corporate authority to own its properties and to conduct its business, as currently conducted.

(b) Authorization. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby are within the corporate power of Somaxon, have been duly
authorized by all necessary corporate proceedings of Somaxon, and this Agreement has been duly
executed and delivered by Somaxon.

(c) No Conflict. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby do not: (i) conflict with or result in a breach of any
provision of Somaxon’s organizational documents; (ii) result in a material breach of any material
agreement to which Somaxon is party; (iii) result in a violation of any Order to which Somaxon is
subject; (iv) require Somaxon to obtain any material approval or consent from any Governmental
Authority or Third Party other than those consents and approvals which have been obtained prior to
the date hereof; or (v) violate any Legal Requirement applicable to Somaxon in any material
respect.

(d) Enforceability. This Agreement constitutes the valid and binding obligation of
Somaxon, enforceable against Somaxon in accordance with its terms, subject to bankruptcy,
reorganization, insolvency and other similar laws affecting the enforcement of creditors’ rights in
general and to general principles of equity (regardless of whether considered in a proceeding in
equity or an action at law).

(e) Somaxon Intellectual Property. To the knowledge of Somaxon, the Promotion and sale
of Product in the Territory in accordance with this Agreement will not infringe any patents,
trademarks or other intellectual property rights of any Third Party. Somaxon has not received any
written claim or demand from any Third Party alleging that any infringement, violation or
misappropriation of such Third Party’s intellectual property rights has occurred as a result of the
manufacture, use, offer for sale, sale or importation of any Product in the Territory. Somaxon is
not aware of any actual, alleged or threatened infringement, violation or misappropriation by a
Third Party of any Somaxon intellectual property rights covering a Product or its uses. Somaxon
has not received any written claim or demand from any Third
Party alleging invalidity or unenforceability of any patents or patent applications owned or
licensed by Somaxon covering a Product or its uses.

(f) Supply. Somaxon currently has access to sufficient supplies of Products to satisfy
the manufacturing obligations required by it under this Agreement. All Products will be
manufactured with reasonable due care and in conformity with the NDAs, current generally accepted
standards and procedures for manufacturing the Products, cGMP and all other applicable Legal
Requirements.

(g) Generic Drug Act. Pursuant to the Generic Drug Enforcement Act of 1992, 21 U.S.C.
§ 335a, as may be amended or supplemented (the “Generic Drug Act”):

(i) none of Somaxon, its Affiliates, or any Person under its direction or control is currently
debarred by the FDA under the Generic Drug Act;

(ii) none of Somaxon, its Affiliates, or any Person under its direction or control is
currently using or will use in any capacity in connection with the Products any Person that is
debarred by FDA under the Generic Drug Act; and

 

23

 

(iii) there have been no convictions of Somaxon, its Affiliates, or any Person under its
direction or control for any of the types of crimes set forth in the Generic Drug Act within the
five years prior to the Effective Date.

(h) Legal Requirements. None of Somaxon, its Affiliates, or any Person under its
direction or control is currently excluded from a federal or state health care program under
Sections 1128 or 1156 of the Social Security Act, 42 U.S.C. §§ 1320a-7, 1320c-5 as may be amended
or supplemented. None of Somaxon, its Affiliates, or Person under its direction or control is
otherwise currently excluded from contracting with the federal government. None of Somaxon, its
Affiliates, or Person under its direction or control is otherwise currently excluded, suspended, or
debarred from any federal or state program. Somaxon shall immediately notify Partner if, at any
time during the Term, Somaxon, its Affiliates, or any Person under its direction or control is
convicted of an offense that would subject it or Partner to exclusion, suspension, or debarment
from any federal or state program.

Section 9.2 Representations and Warranties of Partner

Partner hereby represents and warrants to Somaxon as of the date hereof as follows:

(a) Organization. Partner (i) is a limited liability company duly organized, validly
existing and in good standing under the laws of the state of Delaware, and (ii) has all necessary
organizational power and authority to own its properties and to conduct its business, as currently
conducted.

(b) Authorization. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby are within the organizational power of Partner, have been
duly authorized by all necessary organizational proceedings of Partner, and this Agreement has been
duly executed and delivered by Partner.

(c) No Conflict. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby do not: (i) conflict with or result in a breach of any
provision of
Partner’ organizational documents; (ii) result in a material breach of any material agreement
to which Partner is party; (iii) result in a violation of any Order to which Partner is subject;
(iv) require Partner to obtain any material approval or consent from any Governmental Authority or
Third Party other than those consents and approvals which have been obtained prior to the date
hereof; or (v) violate any Legal Requirement applicable to Partner in any material respect.

(d) Enforceability. This Agreement constitutes the valid and binding obligation of
Partner, enforceable against Partner in accordance with its terms, subject to bankruptcy
reorganization, insolvency and other similar laws affecting the enforcement of creditors’ rights in
general and to general principles of equity (regardless of whether considered in a proceeding in
equity or an action at law).

(e) Generic Drug Act. Pursuant to the Generic Drug Act:

(i) none of Partner, its Affiliates, or any Person under its direction or control is currently
debarred by the FDA under the Generic Drug Act;

(ii) none of Partner, its Affiliates, or any Person under its direction or control is
currently using or will use in any capacity in connection with the Products any Person that is
debarred by FDA under the Generic Drug Act; and

 

24

 

(iii) there have been no convictions of Partner, its Affiliates, or any Person under its
direction or control for any of the types of crimes set forth in the Generic Drug Act within the
five years prior to the Effective Date.

(f) Legal Requirements. None of Partner, its Affiliates, or any Person under its
direction or control is currently excluded from a federal or state health care program under
Sections 1128 or 1156 of the Social Security Act, 42 U.S.C. §§ 1320a-7, 1320c-5 as may be amended
or supplemented. None of Partner, its Affiliates, or any Person under its direction or control is
otherwise currently excluded from contracting with the federal government. None of Partner, its
Affiliates, or Person under its direction or control is otherwise currently excluded, suspended, or
debarred from any federal or state program. Partner shall immediately notify Somaxon if, at any
time during the Term, Partner, its Affiliates, or any Person under its direction or control is
convicted of an offense that would subject it or Somaxon to exclusion, suspension, or debarment
from any federal or state program.

Section 9.3 Somaxon Disclaimer

EXCEPT AS EXPRESSLY PROVIDED HEREIN, SOMAXON DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, WITH REGARD TO THE PRODUCTS, INCLUDING THE WARRANTY OF MERCHANTABILITY AND WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE.

Section 9.4 Partner Disclaimer

EXCEPT AS EXPRESSLY PROVIDED HEREIN, PARTNER DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING THE WARRANTY OF MERCHANTABILITY AND WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE.

ARTICLE X

INTELLECTUAL PROPERTY MATTERS

Section 10.1 Intellectual Property Prosecution and Maintenance

Somaxon shall use commercially reasonable efforts to prosecute, maintain and enforce the
Somaxon intellectual property in the Territory related to any Product Promoted pursuant to this
Agreement (a “Promoted Product”) or its use, including patents, the Somaxon Trademarks and
any copyrights associated with the Promotional Materials.

Section 10.2 Infringement

If either party shall learn of a claim or assertion that the manufacture, use or sale of a
Promoted Product in the Territory infringes or otherwise violates the intellectual property rights
of any Third Party or that any Third Party violates the intellectual property rights owned or
Controlled by Somaxon in a Promoted Product and the Somaxon Trademarks in the Territory, then the
party becoming so informed shall promptly, but in all events within fifteen (15) days thereof,
notify the other party to this Agreement of the claim or assertion. In the event Somaxon receives a
notice under Paragraph IV of the U.S. Federal Drug Price Competition and Patent Term Restoration
Act of 1984, as amended, also known as the Hatch-Waxman Act, with respect to any Promoted Product,
Somaxon shall provide Partner with written notice of such Paragraph IV notice within ten (10)
Business Days.

 

25

 

ARTICLE XI

INDEMNIFICATION; LIMITS ON LIABILITY

Section 11.1 Indemnification

Each party will defend, at its own expense, indemnify and hold harmless the other party and
its Affiliates, and their respective directors, officers, employees, agents, Sales Representatives
and other representatives (collectively, the “Indemnified Persons”), from and against any
and all damages, liabilities, losses, costs, and expenses, including reasonable attorneys’ fees,
arising out of any Third Party claim, suit or proceeding brought against the other party or its
Affiliates, and their respective directors, officers, employees, agents, Sales Representatives and
other representatives, to the extent such claim, suit, or proceeding is based upon a claim arising
out of or relating to (i) any breach or violation of, or failure to perform, any covenant or
agreement made by such indemnifying party in this Agreement, unless waived in writing by the
indemnified party; or (ii) any breach of the representations or warranties made by such
indemnifying party in this Agreement. All such indemnities shall exclude, in each case, any
damages, liabilities, losses, costs, and expenses, including reasonable attorneys’ fees, for which
the indemnified party has an obligation to indemnify the indemnifying party or its Indemnified
Persons pursuant to this Section 11.1, as to which each party shall indemnify the other to the
extent of their respective liability for such damages, liabilities, losses, costs, and expenses,
including reasonable attorneys’ fees.

Product Liability.

Any losses arising out of or resulting from any claims, actions, suits, proceedings, hearings,
investigations or demands of Third Parties that involve death or bodily injury to any individual
and is attributed to the Products, including, without limitation, any product liability actions,
shall be borne by Somaxon; unless and to the extent that such losses arise from any breach of this
Agreement by Partner.

Section 11.2 Limitation on Liability

Except for liability arising under Section 11.1 and 12.1 and the last sentence of Section
4.1(a), Partner’s maximum liability to Somaxon under this Agreement will not exceed the Promotion
Fees.

Section 11.3 Consequential Damages

NEITHER SOMAXON NOR PARTNER (WHICH FOR THE PURPOSES OF THIS SECTION 11.2 SHALL INCLUDE THEIR
RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS) SHALL HAVE ANY LIABILITY TO THE
OTHER FOR ANY PUNITIVE DAMAGES, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES (INCLUDING
WITHOUT LIMITATION, DAMAGES FOR LOST PROFITS), RELATING TO OR ARISING FROM THIS AGREEMENT, EVEN IF
SUCH DAMAGES MAY HAVE BEEN FORESEEABLE; PROVIDED THAT SUCH LIMITATION SHALL NOT APPLY IN THE CASE
OF EITHER PARTY’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 11.1, THE LAST SENTENCE OF SECTION
4.1(A) OR IN THE CASE OF FRAUD OR WILLFUL MISCONDUCT.

ARTICLE XII

CONFIDENTIALITY AND PUBLICITY

Section 12.1 Proprietary Information

Pursuant to this Agreement, a party receiving Proprietary Information from the other, directly
or indirectly, will treat such Proprietary Information as confidential, will use such Proprietary
Information only for the purposes of this Agreement and will not disclose, and will take all
reasonable precautions to prevent the disclosure of, such Proprietary Information to (a) any of its
officers, directors, managers, equity holders, employees, agents, representatives, Affiliates or
consultants, except those who need to know such Proprietary Information and who are bound by a like
obligation of confidentiality or (b) to Third Parties. The provisions of this Section 12.1 shall
survive termination of this Agreement and shall remain in effect until a date three (3) years after
the Term.

 

26

 

Section 12.2 Disclosures Required by Law

In the event the recipient party is required under applicable Legal Requirements to disclose
Proprietary Information of the disclosing party to any Governmental Authority to obtain any
Regulatory Approval for the Products, is required to disclose Proprietary Information in connection
with bona fide legal process (including in connection with any bona fide dispute hereunder) or is
required to disclose Proprietary Information under the rules of the securities exchange upon which
its securities are traded, the recipient party may do so only if it limits disclosure to that
purpose after giving the disclosing party prompt written notice of any instance of such a
requirement in reasonable time for the disclosing party to attempt to object to or to limit such
disclosure. In the event of disclosures required under applicable Legal Requirements, the recipient
party shall cooperate with the disclosing party as reasonably requested thereby.

Section 12.3 Publicity

The parties have agreed upon the form and content of a press release to be issued promptly
following the execution of this Agreement. Once such press release or any other written statement
is approved for disclosure by both parties, either party may make subsequent public disclosure of
the contents of such statement without the further approval of the other party. Any other
publicity, news release, public comment or other public announcement, whether to the press, to
stockholders, or otherwise, relating to this Agreement, shall first be reviewed and approved by
both parties, except no such approval shall be required for such publicity, news release, public
comment or other public announcement which, in accordance with the advice of legal counsel to the
party making such disclosure, is required by law or for appropriate market disclosure; provided,
however, that each party shall be entitled to refer publicly to the relationship of the parties
reflected in this Agreement (i.e., Somaxon as the developer of the Products and Partner as the
promoter of the Products in the Territory) in a manner that is consistent with the joint press
release issued by the parties. For clarity, any party making any announcement which is required by
law will, unless prohibited by law, give the other party an opportunity to review the form and
content of such announcement and comment before it is made. The parties shall work together to
coordinate filings with governmental agencies, including the U. S. Securities and Exchange
Commission, as to the contents and existence of this Agreement as the parties shall reasonably deem
necessary or appropriate and each party shall provide the other party an opportunity to comment on
any proposed filings, including redactions thereto.

ARTICLE XIII

RIGHT OF FIRST NEGOTIATION FOR OTC PRODUCTS

Section 13.1 Right of First Negotiation

During the Term and for one year thereafter, Somaxon shall notify Partner in writing in the
event that Somaxon desires, either alone or with a Third Party, to develop or commercialize a
pharmaceutical product containing doxepin as the sole active pharmaceutical ingredient and for
which a prescription from a Professional is not required in order to dispense, purchase or use such
product (an “OTC Product”). If Partner notifies Somaxon in writing within forty-five (45)
days after receipt of such notice (the “Evaluation Period”) that Partner is not interested
in obtaining rights in and to the OTC Product (such rights, “OTC Product Rights”), or if
Partner fails to notify Somaxon of Partner’s interest in obtaining the OTC Product Rights prior to
the expiration of the Evaluation Period, then Somaxon shall have no further obligation to Partner
under this Agreement with respect to the applicable OTC Product Rights. If Partner is interested in
obtaining the OTC Product Rights, it shall so notify Somaxon in writing prior to the expiration of
the Evaluation Period, and upon Somaxon’s receipt of such notice Partner and Somaxon shall promptly
commence good-faith negotiations, for a period of sixty (60) days and such longer period as may be
mutually agreed upon by the parties in writing in the event the parties have made material progress
in the negotiations (the “Negotiation Period”), regarding the commercially reasonable terms
of an agreement pursuant to which Partner shall obtain the OTC Product Rights. If Somaxon and
Partner have failed to enter into an agreement for the OTC Product Rights upon the expiration of
the Negotiation Period, then Somaxon shall thereafter have the right to negotiate and enter into an
agreement with a Third Party granting the OTC Product Rights to a Third Party. The provisions of
this Section 13.1 shall not apply to, and Somaxon shall have no obligation to Partner under this
Section 13.1 in respect of, any acquisition of Somaxon by a Third Party, any merger or
consolidation with or involving Somaxon, any acquisition by a Third Party of any material portion
of the stock of Somaxon, or any acquisition by a Third Party of a material portion of the assets of
Somaxon in addition to the Products (“Merger 
Transaction”). For clarity, the rights set forth in this Section 13.1 shall survive
the consummation of any Merger Transaction.

 

27

 

ARTICLE XIV

NOTICES

Section 14.1 Notices

All notices required or permitted hereunder shall be given in writing and sent by facsimile
transmission (with a copy sent by first-class mail), or mailed postage prepaid by certified or
registered mail (return receipt requested), or sent by a nationally recognized express courier
service, or hand-delivered at the following address:

If to Partner:

The Procter & Gamble Distributing Company LLC

Two Procter & Gamble Plaza

Cincinnati, Ohio 45202

Attention: J.D. Weedman

Vice President, Global Business Development

With a copy to:

The Procter & Gamble Companay

One Procter & Gamble Plaza

Cincinnati, OH 45202

Attention: Associate General Counsel, Director

Health & Well-Being

If to Somaxon:

Somaxon Pharmaceuticals, Inc.

3570 Carmel Mountain Road

Suite 100

San Diego, California 92130

Attention: Legal Affairs Department

Facsimile: (858) 509-1761

With a copy to (which shall not constitute notice hereunder):

Latham & Watkins LLP

12636 High Bluff Drive, Suite 400

San Diego, California 92130

Attention: Faye H. Russell

Fax No: (858) 523-5450

All notices shall be deemed made upon receipt by the addressee as evidenced by the applicable
written receipt.

 

28

 

ARTICLE XV

INSURANCE

Section 15.1 Insurance

(a) During the Term and for a period of two (2) years after any expiration or termination of
this Agreement, each party shall maintain (i) a commercial general liability insurance policy or
policies with minimum limits of $1,000,000.00 per occurrence and $5,000,000.00 in the aggregate on
an annual basis and (ii) a product liability insurance policy or policies with minimum limits of
$1,000,000.00 per occurrence and $5,000,000.00 in the aggregate on an annual basis. Each party may
self-insure provided that such self-insurance program provides coverage reasonably commensurate
with the foregoing.

(b) Upon request, each party shall provide certificates of insurance to the other evidencing
the coverage specified herein. Neither party’s liability to the other is in any way limited to the
extent of its insurance coverage.

ARTICLE XVI

MISCELLANEOUS

Section 16.1 Headings

The titles, headings or captions and paragraphs in this Agreement are for convenience only and
do not define, limit, extend, explain or describe the scope or extent of this Agreement or any of
its terms or conditions and therefore shall not be considered in the interpretation, construction
or application of this Agreement.

Section 16.2 Severability

In the event that any of the provisions or a portion of any provision of this Agreement is
held to be invalid, illegal, or unenforceable by a court of competent jurisdiction or a
governmental authority, such provision or portion of provision will be construed and enforced as if
it had been narrowly drawn so as not to be invalid, illegal, or unenforceable, and the validity,
legality, and enforceability of the enforceable portion of any such provision and the remaining
provisions will not be adversely affected thereby.

 

29

 

Section 16.3 Entire Agreement

This Agreement, together with the schedules and exhibits hereto and the Confidentiality
Agreement, all of which are incorporated by reference, contains all of the terms agreed to by the
parties regarding the subject matter hereof and supersedes any prior agreements, understandings, or
arrangements between them, whether oral or in writing.

Section 16.4 Amendments

This Agreement may not be amended, modified, altered, or supplemented except by means of a
written agreement or other instrument executed by both of the parties hereto. No course of conduct
or dealing between the parties will act as a modification or waiver of any provisions of this
Agreement.

Section 16.5 Counterparts

This Agreement may be executed in any number of counterparts, each of which will be deemed an
original as against the party whose signature appears thereon, but all of which taken together will
constitute but one and the same instrument.

Section 16.6 Waiver

The failure of either party to enforce or to exercise, at any time or for any period of time,
any term of or any right arising pursuant to this Agreement does not constitute, and will not be
construed as, a waiver of such term or right, and will in no way affect that party’s right later to
enforce or exercise such term or right.

Section 16.7 Force Majeure

(a) In the event of any failure or delay in the performance by a party of any provision of
this Agreement due to acts beyond the reasonable control of such party (such as, for example, fire,
explosion, strike or other difficulty with workmen, shortage of transportation equipment, accident,
act of God, declared or undeclared wars, acts of terrorism, (a “Force Majeure Event”), then
such party shall have such additional time to perform as shall be reasonably necessary under the
circumstances. In the event of such failure or delay, the affected party will use its diligent
efforts, consistent with sound business judgment and to the extent permitted by law, to correct
such failure or delay as expeditiously as possible. In the event that a party is unable to perform
by a reason described in this Section 16.7, its obligation to perform under the affected provision
of this Agreement shall be suspended during such time of nonperformance.

(b) Neither party shall be liable hereunder to the other party nor shall be in breach for
failure to perform its obligations caused by a Force Majeure Event. In the case of any such event,
the affected party shall promptly, but in no event later than ten (10) days of its occurrence,
notify the other party stating the nature of the condition, its anticipated duration and any action
being taken to avoid or minimize its effect. Furthermore, the affected party shall keep the other
party informed of the efforts to resume performance. After sixty (60) days of such inability to
perform, the parties agree to meet and in good faith discuss how to proceed. In the event that the
affected party is prevented from performing its obligations pursuant to this Section 16.7 for a
period of six (6) months, the other party shall have the right to terminate this Agreement pursuant
to the provisions of Sections 8.4(b).

 

30

 

Section 16.8 Successors and Assigns

Subject to Section 16.9 below, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns permitted under this
Agreement.

Section 16.9 Assignment

This Agreement and the rights granted herein shall not be assignable (or otherwise
transferred) by either party hereto without the prior written consent of the other party. Any
attempted assignment without consent shall be void. Notwithstanding the foregoing, a party may
transfer, assign or delegate its rights and obligations under this Agreement without consent to (a)
an Affiliate reasonably capable of performing such party’s obligations under this Agreement or (b)
a successor to all or substantially all of its business or assets of the assigning party to which
this Agreement relates, whether by sale, merger, consolidation, acquisition, transfer, operation of
law or otherwise or (c) in the case of either party, to one or more financial institutions
providing financing to such party pursuant to the terms of a security agreement relating to such
financing. In connection with any assignment, or Subcontracting pursuant to which a Third Party
Sales Representative is engaged to Promote the Products, of this Agreement or any of the rights
granted herein pursuant to this Section 16.9, the assignor, or party Subcontracting to another,
shall ensure that the assignee, or Subcontractor, represents and warrants the matters set forth in
Sections 9.1(g) and (h) (in substantially the same form as set forth in Sections 9.1(g) and (h)),
where Somaxon (or one of its successors or assigns) is the assignor or Subcontracting party, or
represents and warrants the matters set forth in Sections 9.2(g) and (h) (in substantially the same
form as set forth in Sections 9.2(g) and (h)), where Partner (or one of its successors or assigns)
is the assignor or Subcontracting party. In connection with any Subcontracting pursuant to which a
Third Party will manufacture the Products, the party Subcontracting to another shall use its
commercially reasonable efforts to cause the Subcontractor to represent and warrant the matters set
forth in Sections 9.1(g) and (h) (in substantially the same form as set forth in Sections 9.1(g)
and (h)).

Section 16.10 Construction

The parties acknowledge and agree that: (a) each party and its representatives have reviewed
and negotiated the terms and provisions of this Agreement and have contributed to its revision; and
(b) the terms and provisions of this Agreement will be construed fairly as to each party hereto and
not in favor of or against either party regardless of which party was generally responsible for the
preparation or drafting of this Agreement. Unless the context of this Agreement otherwise requires:
(i) words of any gender include each other gender; (ii) words using the singular or plural number
also include the plural or singular number, respectively; (iii) the terms “hereof,” “herein,”
“hereby,” and derivative or similar words refer to this entire Agreement; (iv) the terms “Article,”
“Section,” “Exhibit,” “Schedule,” or “clause” refer to the specified Article, Section, Exhibit,
Schedule, or clause of this Agreement; (v) “or” is disjunctive but not necessarily exclusive; and
(vi) the term “including” or “includes” means “including without limitation” or “includes without
limitation.” Whenever this Agreement refers to a number of days, such number shall refer to
calendar days unless Business Days are specified.

Section 16.11 Governing Law

This Agreement will be construed under and in accordance with, and governed in all respects
by, the laws of the State of New York, without regard to conflicts of law principles that would
result in the application of the laws of any jurisdiction other than the laws of the State of New
York.

 

31

 

Section 16.12 Equitable Relief

Each party acknowledges that a breach by it of the provisions of this Agreement may not
reasonably or adequately be compensated in damages in an action at law and that such a breach may
cause the other party irreparable injury and damage. By reason thereof, each party agrees that
the other party is entitled to seek, in addition to any other remedies it may have under this
Agreement or otherwise, preliminary and permanent injunctive and other equitable relief to prevent
or curtail any breach of this Agreement by the other party; provided, however, that no
specification in this Agreement of a specific legal or equitable remedy will be construed as a
waiver or prohibition against the pursuing of other legal or equitable remedies in the event of
such a breach. Each party agrees that the existence of any claim, demand, or cause of action of it
against the other party, whether predicated upon this Agreement, or otherwise, will not constitute
a defense to the enforcement by the other party, or its successors or assigns, of the covenants
contained in this Agreement.

Section 16.13 Relationship Between Parties

The parties hereto are acting and performing as independent contractors, and nothing in this
Agreement creates the relationship of partnership, joint venture, sales agency, or principal and
agent. Neither party is the agent of the other, and neither party may hold itself out as such to
any other party. All financial obligations associated with each party’s business will be the sole
responsibility of such party.

[Signature page follows]

 

32

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in duplicate on the
day and year first above written.

	 	 	 	 	 
	SOMAXON PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Richard W. Pascoe
 

Name: Richard W. Pascoe
	 	 
	 

	 	Title: President and Chief Executive Officer	 	 
	 
	 	 	 	 
	THE PROCTER & GAMBLE DISTRIBUTING COMPANY LLC	 	 
	 
	 	 	 	 
	By:
	 	/s/ Jeffrey D. Weedman	 	 
	 

	 	 

Name: Jeffrey D. Weedman
	 	 
	 

	 	Title:  Vice President, Global Business Development	 	 

 

33

 

SCHEDULE 1.66

SOMAXON TRADEMARKS

TRADEMARKS:

Somaxon Pharmaceuticals

Silenor

DOMAIN NAMES:

silenor.biz

silenor.com

silenor.net

silenor.org

somaxon.biz

somaxon.com

somaxon.net

somaxon.org

 

34exv10w1

Exhibit 10.1

SUBSCRIPTION AGREEMENT

Biodel Inc.

100 Saw Mill Road

Danbury, CT 06810

Gentlemen:

     The undersigned (the “Investor”) hereby confirms its agreement with Biodel Inc., a Delaware
corporation (the “Company”), as follows:

     1. This Subscription Agreement, including the Terms and Conditions for Purchase
of Units attached hereto as Annex I (collectively, this “Agreement”) is made as
of the date set forth below between the Company and the Investor.

     2. The Company has authorized the sale and issuance to certain investors of up to an
aggregate of 2,398,200 units (the “Units”), with each Unit consisting of (i) one share
(the “Share,” collectively, the “Shares”) of its common stock, par value $0.01 per share
(the “Common Stock”), and (ii) one warrant (the “Warrant,” collectively, the “Warrants”)
to purchase one share of Common Stock (and the fractional amount being the “Warrant
Ratio”), in substantially the form attached hereto as Exhibit B, for a purchase
price of $3.93 per Unit (the “Purchase Price”). Units will not be issued or
certificated. The Shares and Warrants are immediately separable and will be issued
separately. The shares of Common Stock issuable upon exercise of the Warrants are
referred to herein as the “Warrant Shares” and, together with the Units, the Shares and
the Warrants, are referred to herein as the “Securities”).

     3. The offering and sale of the Units (the “Offering”) are being made pursuant to
(a) an effective Registration Statement on Form S-3, No. 333-153167 (the “Registration
Statement”) filed by the Company with the Securities and Exchange Commission (the
“Commission”), including the Prospectus contained therein (the “Base Prospectus”), (b) if
applicable, certain “free writing prospectuses” (as that term is defined in Rule 405
under the Securities Act of 1933, as amended (the “Act”)), that have been or will be
filed, if required, with the Commission and delivered to the Investor on or prior to the
date hereof (the “Issuer Free Writing Prospectus”), containing certain supplemental
information regarding the Units, the terms of the Offering and the Company, and (c) a
Prospectus Supplement (the “Prospectus Supplement” and, together with the Base
Prospectus, the “Prospectus”) containing certain supplemental information regarding the
Units and terms of the Offering that will be filed with the Commission and delivered to
the Investor (or made available to the Investor by the filing by the Company of an
electronic version thereof with the Commission).

     4. The Company and the Investor agree that the Investor will purchase from the
Company and the Company will issue and sell to the Investor the Units set forth below for
the aggregate purchase price set forth below. The Units shall be purchased pursuant to
the Terms and Conditions for Purchase of Units attached hereto as Annex I and
incorporated herein by this reference as if fully set

 

 

forth herein. The Investor
acknowledges that the Offering is not being underwritten by the Placement
Agent (the “Placement Agent”) named in the Prospectus Supplement and that there is
no minimum offering amount.

     5. The manner of settlement of the Shares included in the Units purchased by the
Investor shall be as follows:

Delivery versus payment (“DVP”) through the Depository Trust Company (“DTC”)
(i.e., on the Closing Date, the Company shall instruct Continental Stock Transfer
& Trust Company, its “Transfer Agent”, to issue the Shares registered in the Investor’s
name and address as set forth below and released by the Transfer Agent to the Investor
through DTC at the Closing directly to the account(s) at the Placement Agent identified
by the Investor; upon receipt of such Shares, the Placement Agent shall promptly
electronically deliver such Shares to the Investor, and simultaneously therewith payment
shall be made by the Placement Agent by wire transfer to the Company). NO LATER THAN ONE
(1) BUSINESS DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY,
THE INVESTOR SHALL:

	 	(I)	 	NOTIFY THE PLACEMENT AGENT OF THE ACCOUNT OR ACCOUNTS AT THE PLACEMENT
AGENT TO BE CREDITED WITH THE SHARES BEING PURCHASED BY SUCH INVESTOR, AND
	 
	 	(II)	 	CONFIRM THAT THE ACCOUNT OR ACCOUNTS AT THE PLACEMENT AGENT TO BE
CREDITED WITH THE SHARES BEING PURCHASED BY THE INVESTOR HAVE A MINIMUM BALANCE
EQUAL TO THE AGGREGATE PURCHASE PRICE FOR THE UNITS BEING PURCHASED BY THE INVESTOR.

IT IS THE INVESTOR’S RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER OR CONFIRM
THE PROPER ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR SETTLEMENT BY WAY OF DVP
IN A TIMELY MANNER. IF THE INVESTOR DOES NOT DELIVER THE AGGREGATE PURCHASE PRICE FOR THE
UNITS OR DOES NOT MAKE PROPER ARRANGEMENTS FOR SETTLEMENT IN A TIMELY MANNER, THE SHARES AND
WARRANTS MAY NOT BE DELIVERED AT CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED
FROM THE CLOSING ALTOGETHER.

     6. The executed Warrant shall be delivered in accordance with the terms thereof.

     7. The Investor represents that, except as set forth below, (a) it has had no position, office
or other material relationship within the past three years with the Company or persons known to it
to be affiliates of the Company, (b) it is not a member of the Financial Industry Regulatory
Authority, Inc. or an Associated Person (as such term is defined under the NASD Membership and
Registration Rules Section 1011) as of the Closing, and (c) neither the Investor nor any group of
Investors (as identified in a public filing made with the Commission) of which the Investor is a
part in connection with the Offering of the Units, acquired, or obtained the right to acquire, 20%
or more of the Common Stock (or securities convertible into or exercisable for Common Stock) or the
voting power of the Company on a post-transaction basis.

- 2 -

 

Exceptions:

 

(If no exceptions, write “none.” If left blank, response will be deemed to be “none.”)

     8. The Investor represents that it has received (or otherwise had made available to it by the
filing by the Company of an electronic version thereof with the Commission) the Base Prospectus,
dated February 3, 2010, which is a part of the Company’s Registration Statement, the documents
incorporated by reference therein and any free writing prospectus (collectively, the “Disclosure
Package”), prior to or in connection with the receipt of this Agreement. The Investor acknowledges
that, prior to the delivery of this Agreement to the Company, the Investor will receive certain
additional information regarding the Offering, including pricing information (the “Offering
Information”). Such information may be provided to the Investor by any means permitted under the
Act, including the Prospectus Supplement, a free writing prospectus and oral communications.

     9. No offer by the Investor to buy Units will be accepted and no part of the Purchase Price
will be delivered to the Company until the Investor has received the Offering Information and the
Company has accepted such offer by countersigning a copy of this Agreement, and any such offer may
be withdrawn or revoked, without obligation or commitment of any kind, at any time prior to the
Company (or Placement Agent on behalf of the Company) sending (orally, in writing or by electronic
mail) notice of its acceptance of such offer. An indication of interest will involve no obligation
or commitment of any kind until the Investor has been delivered the Offering Information and this
Agreement is accepted and countersigned by or on behalf of the Company. The Investor understands
and agrees that the Company, in its sole discretion, reserves the right to accept or reject this
subscription for Units, in whole or in part.

     10. The Company acknowledges that the only material, non-public information relating to the
Company it has provided to the Investor in connection with the Offering prior to the date hereof is
the existence of the Offering. The Company understands and confirms that the Investor will
rely on the foregoing representations in effecting transactions in securities of the Company.

REMAINDER OF PAGE LEFT BLANK

- 3 -

 

Number of Units:                                                             
            

Purchase Price Per Unit: $                                                            

Aggregate Purchase Price: $                                                         

     Please confirm that the foregoing correctly sets forth the agreement between us by signing in
the space provided below for that purpose.

	 	 	 	 	 	 	 

	 	 	Dated as of: August 24, 2010	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	INVESTOR	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Print Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

Agreed and Accepted

this 24th day of August, 2010:

BIODEL INC.

	 	 	 	 	 

	By:
	 	 	 	 
	Title:

	 	 

	 	 

- 4 -

 

ANNEX I

TERMS AND CONDITIONS FOR PURCHASE OF UNITS

     1. Authorization and Sale of the Units. Subject to the terms and conditions of this
Agreement, the Company has authorized the sale of the Units.

     2. Agreement to Sell and Purchase the Units; Placement Agent.

          2.1 At the Closing (as defined in Section 3.1), the Company will sell to the
Investor, and the Investor will purchase from the Company, upon the terms and conditions set forth
herein, the number of Units set forth on the last page of the Agreement to which these Terms and
Conditions for Purchase of Units are attached as Annex I (the “Signature Page”) for the
aggregate purchase price therefor set forth on the Signature Page.

          2.2 The Company proposes to enter into substantially this same form of Subscription
Agreement with certain other investors (the “Other Investors”) and expects to complete sales of
Units to them. The Investor and the Other Investors are hereinafter sometimes collectively
referred to as the “Investors,” and this Agreement and the Subscription Agreements executed by the
Other Investors are hereinafter sometimes collectively referred to as the “Agreements”).

          2.3 Investor acknowledges that the Company has agreed to pay Wedbush Securities Inc., William
Blair & Company, L.L.C. and Leerink Swann LLC (collectively, the “Placement Agents”) a fee (the
“Placement Fee”) in respect of the sale of Units to the Investors.

          2.4 The Company has entered into a Placement Agent Agreement, dated August 24, 2010 (the
“Placement Agreement”), with the Placement Agent that contains certain representations, warranties,
covenants and agreements of the Company that may be relied upon by the Investor, which shall be a
third party beneficiary thereof.

     3. Closing and Delivery of the Shares, Warrants and Funds.

     3.1 Closing. The completion of the purchase and sale of the Units (the “Closing”)
shall occur at a place and time (the “Closing Date”) to be specified by the Company and the
Placement Agent, and of which the Investor will be notified in advance by the Placement Agent, in
accordance with Rule 15c6-1 promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). At the Closing, (a) the Company shall cause the Transfer Agent to deliver to the
Investor the number of Shares set forth on the Signature Page registered in the name of the
Investor or, if so indicated on the Investor Questionnaire attached hereto as Exhibit A, in
the name of a nominee designated by the Investor, (b) the Company shall cause to be delivered to
the Investor a Warrant to purchase a number of whole Warrant Shares determined by multiplying the
number of Shares set forth on the signature page by the Warrant Ratio and rounding down to the
nearest whole number and (c) the aggregate purchase price for the Units being purchased by the
Investor will be delivered by or on behalf of the Investor to the Company.

          3.2 Conditions to the Obligations of the Parties.

               (a) Conditions to the Company’s Obligations. The Company’s obligation to issue and
sell the Units to the Investor shall be subject to: (i) the receipt by the Company of the

- 5 -

 

purchase
price for the Units being purchased hereunder as set forth on the Signature Page and (ii) the
accuracy of the representations and warranties made by the Investor and the fulfillment of those
undertakings of the Investor to be fulfilled prior to the Closing Date.

               (b) Conditions to the Investor’s Obligations. The Investor’s obligation to purchase
the Units will be subject to the accuracy of the representations and warranties made by the Company
and the fulfillment of those undertakings of the Company to be fulfilled prior to the Closing Date,
including without limitation, those contained in the Placement Agreement, and to the condition that
the Placement Agent shall not have: (i) terminated the Placement Agreement pursuant to the terms
thereof or (ii) determined that the conditions to the closing in the Placement Agreement have not
been satisfied. The Investor’s obligations are expressly not conditioned on the purchase by any or
all of the Other Investors of the Units that they have agreed to purchase from the Company. The
Investor understands and agrees that, in the event that the Placement Agent in its sole discretion
determines that the conditions to closing in the Placement Agreement have not been satisfied or if
the Placement Agent Agreement may be terminated for any other reason permitted by such Agreement,
then the Placement Agent may, but shall not be obligated to, terminate such Agreement, which shall
have the effect of terminating this Subscription Agreement pursuant to Section 15 below.

          3.3 Delivery of Funds.

               (a) Delivery Versus Payment through The Depository Trust Company. The Investor elects
to settle the Shares purchased by such Investor by delivery versus payment through DTC. No
later than one (1) business day after the execution of this Agreement by the Investor and the
Company, the Investor shall confirm that the account or accounts at the Placement Agent to be
credited with the Units being purchased by the Investor have a minimum balance equal to the
aggregate purchase price for the Units being purchased by the Investor.

          3.4 Delivery of Shares.

               (a) Delivery Versus Payment through The Depository Trust Company. The Investor elects
to settle the Shares purchased by such Investor by delivery versus payment through DTC. No
later than one (1) business day after the execution of this Agreement by the Investor and the
Company, the Investor shall notify the Placement Agent of the account or accounts at the
Placement Agent to be credited with the Shares being purchased by such Investor. On the Closing
Date, the Company shall deliver the Shares to the Investor through DTC directly to the account(s)
at the Placement Agent identified by Investor and simultaneously therewith payment shall be made by
the Placement Agent by wire transfer to the Company.

     4. Representations, Warranties and Covenants of the Investor.

     The Investor acknowledges, represents and warrants to, and agrees with, the Company and
the Placement Agent that:

          4.1 The Investor (a) is knowledgeable, sophisticated and experienced in making, and is
qualified to make decisions with respect to, investments in shares presenting an investment
decision like that involved in the purchase of the Units, including investments in securities
issued by the Company and investments in comparable companies, (b) has answered all questions on
the Signature Page and the Investor Questionnaire and the answers thereto are true and correct as
of the date hereof

- 6 -

 

and will be true and correct as of the Closing Date and (c) in connection with
its decision to purchase the number of Units set forth on the Signature Page, has received and is
relying only upon the Disclosure Package and the documents incorporated by reference therein and
the Offering Information.

          4.2 (a) No action has been or will be taken in any jurisdiction outside the United States
by the Company or the Placement Agent that would permit an offering of the Units, or possession or
distribution of offering materials in connection with the issue of the Securities in any
jurisdiction outside the United States where action for that purpose is required, (b) if the
Investor is outside the United States, it will comply with all applicable laws and regulations in
each foreign jurisdiction in which it purchases, offers, sells or delivers Securities or has in its
possession or distributes any offering material, in all cases at its own expense and (c) the
Placement Agent is not authorized to make and has not made any representation, disclosure or use of
any information in connection with the issue, placement, purchase and sale of the Units, except as
set forth or incorporated by reference in the Base Prospectus, the Prospectus Supplement or any
free writing prospectus.

          4.3 (a) The Investor has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken all necessary action
to authorize the execution, delivery and performance of this Agreement, and (b) this Agreement
constitutes a valid and binding obligation of the Investor enforceable against the Investor in
accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding in equity or at
law) and except as to the enforceability of any rights to indemnification or contribution that may
be violative of the public policy underlying any law, rule or regulation (including any federal or
state securities law, rule or regulation).

          4.4 The Investor understands that nothing in this Agreement, the Prospectus, the Disclosure
Package, the Offering Information or any other materials presented to the Investor in connection
with the purchase and sale of the Units constitutes legal, tax or investment advice. The Investor
has consulted such legal, tax and investment advisors and made such investigation as it, in its
sole discretion, has deemed necessary or appropriate in connection with its purchase of Units. The
Investor also understands that there is no established public trading market for the Warrants being
offered in the Offering, and that the Company does not expect such a market to develop. In
addition, the Company does not intend to apply for listing the Warrants on any securities exchange.
Without an active market, the liquidity of the Warrants will be limited.

          4.5 Since the date on which the Placement Agent first contacted the Investor about the
Offering, the Investor has not disclosed any information regarding the Offering to any third
parties (other than its legal, accounting and other advisors) and has not engaged in any purchases
or sales involving the securities of the Company (including, without limitation, any Short Sales
involving the Company’s securities). The Investor covenants that it will not engage in any
purchases or sales involving the securities of the Company (including Short Sales) prior to the
time that the transactions contemplated by this Agreement are publicly disclosed. The Investor
agrees that it will not use any of the Securities acquired pursuant to this Agreement to cover any
short position in the Common Stock if doing so would be in violation of applicable securities laws.
For purposes hereof, “Short Sales” include, without limitation, all “short sales” as defined in
Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or not against the box,
and all types of direct and indirect stock pledges, forward sales contracts, options, puts, calls,
short sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act)
and similar arrangements (including on a total return basis), and sales and other transactions
through non-US broker dealers or foreign regulated brokers.

     5. Covenants.

          5.1 Company Lock-up. Subject to Section 5.2, from the date hereof until the
expiration of ninety (90) days from the date hereof, the Company will not, without the consent of

- 7 -

 

the Investor, (i) file any registration statement (other than a registration statement on Form S-8)
with the Commission with respect to any equity securities of the Company, (ii) amend, modify or
change the terms of any warrants to acquire Common Stock outstanding on the date hereof, or (iii)
directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or
announce any offer, sale, grant or any option to purchase or other disposition of) any of its or
its subsidiaries’ equity or equity equivalent securities, including without limitation any debt,
preferred stock or other instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for shares of Common Stock or
Convertible Securities (any such offer, sale, grant, disposition or announcement being referred to
as a “Subsequent Placement”).

          5.2 Excluded Securities Transactions. Notwithstanding the foregoing, Section
5.1 shall not apply in respect of the issuance of (A) awards to directors, officers, consultants or
employees of the Company in their capacity as such pursuant to an Approved Share Plan (as defined
below), provided that (1) all such issuances (taking into account the shares of Common Stock
issuable upon exercise of such awards) after the date hereof pursuant to this clause (A) do not, in
the aggregate,
exceed more than 25% of the Common Stock issued and outstanding immediately prior to the date
hereof and (2) the exercise price of any such awards is not lowered, none of such awards are
amended to increase the number of shares issuable thereunder and none of the terms or conditions of
any such options are otherwise materially changed in any manner that adversely affects any of the
Investors; (B) shares of Common Stock issued upon the conversion or exercise of Convertible
Securities (other than awards issued pursuant to an Approved Share Plan that are covered by clause
(A) above) issued prior to the date hereof, provided that the conversion price of any such
Convertible Securities (other than awards issued pursuant to an Approved Share Plan that are
covered by clause (A) above) is not lowered, none of such Convertible Securities (other than awards
issued pursuant to an Approved Share Plan that are covered by clause (A) above) are amended to
increase the number of shares issuable thereunder and none of the terms or conditions of any such
Convertible Securities (other than awards issued pursuant to an Approved Share Plan that are
covered by clause (A) above) are otherwise materially changed in any manner that adversely affects
any of the Investors; (C) the Warrant Shares issuable upon exercise of any Warrant, provided that
the exercise price of such Warrant is not lowered (other than in accordance with its terms), such
Warrant is not amended to increase the number of shares issuable thereunder and none of the terms
or conditions of such Warrant are otherwise materially changed in any manner that adversely affects
any of the Investors (other than the holder of such Warrant); and (D) shares of Common Stock
issued in connection with any strategic transaction that includes a commercial relationship
(including joint ventures, marketing or distribution arrangements, collaboration agreements or
intellectual property license agreements), but shall not include a transaction in which the Company
is issuing securities primarily for the purpose of raising capital or issued to a person or entity
whose primary business is investing in securities; provided that any such shares of Common Stock
and securities issued pursuant to this clause (D) during the 90-day restricted period described in
Section 5.1 above shall be subject to the restrictions described above for the remainder of such
restricted period (each of the foregoing in clauses (A) through (D), collectively the “Excluded
Securities”). “Approved Share Plan” means any employee benefit plan which has been approved by the
board of directors of the Company prior to or subsequent to the date hereof pursuant to which
shares of Common Stock and other Common Stock-based awards may be issued to any employee, officer,
consultant or director for services provided to the Company in their capacity as such. “Convertible
Securities” means any capital stock or other security of the Company or any of its Subsidiaries
that is at any time and under any circumstances directly or indirectly convertible into,
exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any
capital

- 8 -

 

stock or other security of the Company (including, without limitation, Common Stock) or any
of its Subsidiaries.

          5.3 Variable Securities. Until none of the Warrants are outstanding, the Company
shall be prohibited from effecting or entering into an agreement to effect any Subsequent Placement
involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the
Company or any Subsidiary (i) issues or sells any Convertible Securities either (A) at a
conversion, exercise or exchange rate or other price that is based upon and/or varies with the
trading prices of, or quotations for, the shares of Common Stock at any time after the initial
issuance of such Convertible Securities, or (B) with a conversion, exercise or exchange price that
is subject to being reset at some future date after the initial issuance of such Convertible
Securities or upon the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock, other than pursuant to a
customary “weighted average” anti-dilution provision or (ii) enters into any agreement (including,
without limitation, an equity line of credit) whereby the Company or any Subsidiary may sell
securities at a future determined price (other than standard and customary “preemptive” or
“participation” rights). Each Investor shall be entitled to obtain injunctive relief against the
Company and its Subsidiaries to preclude any such issuance, which remedy shall be in addition to
any right to collect damages.

     6. Survival of Representations, Warranties and Agreements. Notwithstanding any
investigation made by any party to this Agreement or by the Placement Agent, all covenants,
agreements, representations and warranties made by the Company and the Investor herein will survive
the execution of this Agreement, the delivery to the Investor of the Shares and Warrants being
purchased and the payment therefor.

     7. Notices. All notices, requests, consents and other communications hereunder will
be in writing, will be mailed (a) if within the domestic United States by first-class registered or
certified airmail, or nationally recognized overnight express courier, postage prepaid, or by
facsimile or (b) if delivered from outside the United States, by International Federal Express or
facsimile, and (c) will be deemed given (i) if delivered by first-class registered or certified
mail domestic, three business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by International Federal
Express, two business days after so mailed and (iv) if delivered by facsimile, upon electronic
confirmation of receipt and will be delivered and addressed as follows:

	 	(a)	 	if to the Company, to:
	 
	 	 	 	Biodel Inc.
100
Saw Mill Road

Danbury, CT 06810

Attn: President and Chief Executive Officer

Facsimile: (203) 796-5001

- 9 -

 

	 
	 	(b)	 	with copies to:

	 	 	 	Wilmer Cutler Pickering Hale and Dorr LLP 399
Park Avenue

New York, NY 10022

Attention: Stuart R. Nayman, Esq.

Facsimile: (212) 230-8888
	 
	 	(c)	 	if to the Investor, at its address on the Signature Page
hereto, or at such other address or addresses as may have been
furnished to the Company in writing.

     8. Changes. This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and the Investor.

     9. Headings. The headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this Agreement.

     10. Severability. In case any provision contained in this Agreement should be invalid,
illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions contained herein will not in any way be affected or impaired thereby.

     11. Governing Law. This Agreement will be governed by, and construed in accordance with, the
internal laws of the State of New York, without giving effect to the principles of conflicts of law
that would require the application of the laws of any other jurisdiction.

     12. Counterparts. This Agreement may be executed in two or more counterparts, each of which
will constitute an original, but all of which, when taken together, will constitute but one
instrument, and will become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties. The Company and the Investor acknowledge and agree that
the Company shall deliver its counterpart to the Investor along with the Prospectus Supplement (or
the filing by the Company of an electronic version thereof with the Commission).

     13. Confirmation of Sale. The Investor acknowledges and agrees that such Investor’s receipt
of the Company’s signed counterpart to this Agreement, together with the Prospectus Supplement (or
the filing by the Company of an electronic version thereof with the Commission), shall constitute
written confirmation of the Company’s sale of Units to such Investor.

     14. Press Release. The Company and the Investor agree that the Company shall, prior to the
opening of the financial markets in New York City on the business day immediately after the date
hereof, (a) issue a press release announcing the Offering and disclosing all material information
regarding the Offering and (b) file a Current Report on Form 8-K with the Securities and Exchange
Commission including a form of this Agreement and a form of Warrant as exhibits thereto.

     15. Termination. In the event that the Placement Agreement is terminated by the Placement
Agent pursuant to the terms thereof, this Agreement shall terminate without any further action on
the part of the parties hereto.

- 10 -

 

Exhibit A

BIODEL INC.

INVESTOR QUESTIONNAIRE

     Pursuant to Section 3 of Annex I to the Agreement, please provide us with the
following information:

	 	 	 	 	 

	1.

	 	The exact name that your Shares and Warrants are to be registered
in. You may use a nominee name if appropriate:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	2.

	 	The relationship between the Investor and the registered holder
listed in response to item 1 above:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	3.

	 	The mailing address of the registered holder listed in response to
item 1 above:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	4.

	 	The Social Security Number or Tax Identification Number of the
registered holder listed in the response to item 1 above:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	5.

	 	Name of DTC Participant (broker-dealer at which the account or
accounts to be credited with the Shares are maintained):	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	6.

	 	DTC Participant Number:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	7.

	 	Name of Account at DTC Participant being credited with the Shares:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	8.

	 	Account Number at DTC Participant being credited with the Shares:

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