REGISTRATION RIGHTS AGREEMENT
Exhibit 10.3
Execution Copy
This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of May 21st, 2008, is
by and between SOMAXON PHARMACEUTICALS, INC. (the “Company”) and KINGSBRIDGE CAPITAL
LIMITED (the “Investor”).
WHEREAS, the Company and the Investor have entered into that certain Common Stock Purchase
Agreement, dated as of the date hereof (the “Purchase Agreement”), pursuant to which the
Company may issue, from time to time, to the Investor up to $50 million worth of shares of Common
Stock as provided for therein;
WHEREAS, pursuant to the terms of, and in partial consideration for the Investor entering
into, the Purchase Agreement, the Company has issued to the Investor a warrant, exercisable from
time to time, in accordance with its terms, within five (5) years following the six-month
anniversary of the date of issuance (the “Warrant”) for the purchase of an aggregate of up
to 165,000 shares of Common Stock at a price specified in such Warrant;
WHEREAS, pursuant to the terms of, and in partial consideration for, the Investor’s agreement
to enter into the Purchase Agreement, the Company has agreed to provide the Investor with certain
registration rights with respect to the Registrable Securities (as defined in the Purchase
Agreement) as set forth herein;
NOW, THEREFORE, in consideration of the premises, the representations, warranties, covenants
and agreements contained herein, in the Warrant, and in the Purchase Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, intending
to be legally bound hereby, the parties hereto agree as follows (capitalized terms used herein and
not defined herein shall have the respective meanings ascribed to them in the Purchase Agreement):
ARTICLE I
REGISTRATION RIGHTS
REGISTRATION RIGHTS
Section 1.1 Registration Statement.
(a) Filing of the Registration Statement. Upon the terms and subject to the
conditions set forth in this Agreement, the Company shall file with the Commission within sixty
(60) calendar days after the Closing Date a registration statement in the Company’s sole
discretion, on either Form S-1 or Form S-3 under the Securities Act or such other form as deemed
appropriate by counsel to the Company for the registration for the resale by the Investor of the
Registrable Securities (the “Registration Statement”).
(b) Effectiveness of the Registration Statement. The Company shall use commercially
reasonable efforts (i) to have the Registration Statement declared effective by the Commission as
soon as reasonably practicable, but in any event no later than one hundred eighty (180) calendar
days after the Closing Date and (ii) to ensure that the Registration Statement remains
in effect
throughout the term of this Agreement as set forth in Section 4.2, subject to the terms and
conditions of this Agreement.
(c) Regulatory Disapproval; Breach by the Investor. The contemplated effective date
for the Registration Statement as described in Section 1.1(b) shall be extended without default or
the accrual of liquidated damages hereunder or under the Purchase Agreement in the event that the
Company’s failure to obtain the effectiveness of the Registration Statement on a timely basis
results from (i) the Commission’s disapproval of the structure of the transactions contemplated by
the Purchase Agreement or (ii) events or circumstances that are not in any way attributable to the
Company. In such event, the parties agree to cooperate with one another in good faith to arrive at
a resolution acceptable to the Commission. In addition, the contemplated effective date for the
Registration Statement as described in Section 1.1(b) shall be extended without default or the
accrual of liquidated damages hereunder or under the Purchase Agreement in the event that the
Company’s failure to obtain the effectiveness of the Registration Statement on a timely basis
results solely from a breach by the Investor of its obligations under the Purchase Agreement or
under this Agreement.
(d) Failure to Maintain Effectiveness of Registration Statement. In the event the
Company fails to maintain the effectiveness of the Registration Statement (or the Prospectus)
throughout the period set forth in Section 4.2, other than temporary suspensions as set forth in
Section 1.1(e) and the Investor holds any Registrable Securities at any time during the period of
such ineffectiveness (an “Ineffective Period”), and provided that such failure to maintain
effectiveness was within the reasonable control of the Company (for the avoidance of doubt, the
suspension of effectiveness of the Registration Statement as the result of filing a post-effective
amendment to the Registration Statement when required pursuant to Section 10(a)(3) under the
Securities Act or Item 512(a)(1) of Regulation S-K shall be deemed not to be within the reasonable
control of the Company), the Company shall pay on demand to the Investor in immediately available
funds into an account designated by the Investor an amount equal to the product of (i) the total
number of Registrable Securities issued to the Investor under the Purchase Agreement (which, for
the avoidance of doubt, shall not include any Warrant Shares) and owned by the Investor at any time
during such Ineffective Period (and not otherwise sold, hypothecated or transferred) and (ii) the
result, if greater than zero, obtained by subtracting the VWAP on the Trading Day immediately
following the last day of such Ineffective Period from the VWAP on the Trading Day immediately
preceding the day on which any such Ineffective Period began; provided, however, that (A) the
foregoing payments shall not apply in respect of Registrable Securities (I) that are otherwise
freely tradable by the Investor, including pursuant to Rule 144 under the Securities Act (as such
Rule may be amended from time to time, “Rule 144”) or (II) if the Company offers to
repurchase from the Investor such Registrable Securities for a per share purchase price equal to
the VWAP on the Trading Day immediately preceding the day on which any such Ineffective Period
began and (B) unless otherwise required by any applicable federal and state securities laws, the
Company shall be under no obligation to supplement the Prospectus to reflect the issuance of any
Shares pursuant to a Draw Down at any time prior to the day
following the last to occur Settlement Date with respect to such Draw Down and that the
failure to supplement the Prospectus prior to such time shall not be deemed a failure to maintain
the effectiveness of the Registration Statement (or Prospectus) for purposes of this Agreement
(including this Section 1.1(d)).
(e) Deferral or Suspension During a Blackout Period. Notwithstanding the provisions
of Section 1.1(d), if in the good faith judgment of the Company, following consultation
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with legal
counsel, it would be detrimental to the Company or its stockholders for the Registration Statement
to be filed or for resales of Registrable Securities to be made pursuant to the Registration
Statement due to (i) the existence of a material development or potential material development
involving the Company that the Company would be obligated to disclose or incorporate by reference
in the Registration Statement, which disclosure would be premature or otherwise inadvisable at such
time or would have a Material Adverse Effect on the Company or its stockholders, or (ii) a filing
of a Company-initiated registration of any class of its equity securities, which, in the good faith
judgment of the Company, would adversely affect or require premature disclosure of the filing of
such Company-initiated registration (notice thereof, a “Blackout Notice”), the Company
shall have the right to (A) immediately defer such filing for a period of not more than sixty (60)
days beyond the date by which such Registration Statement was otherwise required hereunder to be
filed or (B) suspend use of such Registration Statement for a period of not more than thirty (30)
days (any such deferral or suspension period, a “Blackout Period”). The Investor
acknowledges that it would be seriously detrimental to the Company and its stockholders for such
Registration Statement to be filed (or remain in effect) during a Blackout Period and therefore
essential to defer such filing (or suspend the use thereof) during such Blackout Period and agrees
to cease any disposition of the Registrable Securities during such Blackout Period. The Company
may not utilize any of its rights under this Section 1.1(e) to defer the filing of a Registration
Statement (or suspend its effectiveness) more than six (6) times in any twelve (12) month period.
In the event that, within fifteen (15) Trading Days following any Settlement Date, the Company
delivers a Blackout Notice to the Investor and the VWAP on the Trading Day immediately preceding
such Blackout Period (“Old VWAP”) is greater than the VWAP on the first Trading Day
following such Blackout Period that the Investor may sell its Registrable Securities pursuant to an
effective Registration Statement (“New VWAP”), then the Company shall pay to the Investor,
by wire transfer of immediately available funds to an account designated by the Investor, the
“Blackout Amount.” For the purposes of this Agreement, Blackout Amount means a percentage
equal to: (X) in the event that the Registration Statement was effective on Form S-3 on the
Trading Day immediately prior to such Blackout Period (1) seventy-five percent (75%) if such
Blackout Notice is delivered prior to the fifth (5th) Trading Day following such Settlement Date;
(2) fifty percent (50%) if such Blackout Notice is delivered on or after the fifth (5th) Trading
Day following such Settlement Date, but prior to the tenth (10th) Trading Day following such
Settlement Date; (3) twenty-five percent (25%) if such Blackout Notice is delivered on or after the
tenth (10th) Trading Day following such Settlement Date, but prior to the fifteenth (15th) Trading
Day following such Settlement Date; and (4) zero percent (0%) thereafter of: the product of (i) the
number of Registrable Securities purchased by the Investor pursuant to the most recent Draw Down
and actually held by the Investor immediately prior to the Blackout Period and (ii) the result, if
greater than zero, obtained by subtracting the New VWAP from the Old VWAP or (Y) in the event that
the Registration Statement was effective on a form other than Form S-3 on the Trading
Day immediately preceding such Blackout Period, one hundred percent (100%); provided,
however, that no Blackout Amount shall be payable in respect of Registrable Securities (A)
that are otherwise freely tradable to United States Persons by the Investor, including under Rule
144, during the Blackout Period, or (B) if the Company offers to repurchase from the Investor such
Registrable Securities for a per share purchase price at least equal to the VWAP on the Trading Day
immediately preceding the day on which any such Blackout Period began. For any Blackout Period in
respect of which a Blackout Amount becomes due and payable, rather than paying the Blackout Amount,
the Company may at its sole discretion, issue to the Investor shares of Common Stock with
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an
aggregate market value determined as of the first Trading Day following such Blackout Period equal
to the Blackout Amount (“Blackout Shares”).
(f) Liquidated Damages. The Company and the Investor hereto acknowledge and agree
that the amounts payable under Sections 1.1(d) and 1.1(e) and the Blackout Shares deliverable under
Section 1.1(e) above shall constitute liquidated damages and not penalties. The parties further
acknowledge that (A) the amount of loss or damages likely to be incurred by the Investor is
incapable or is difficult to precisely estimate, (B) the amounts specified in such subsections bear
a reasonable proportion and are not plainly or grossly disproportionate to the probable loss likely
to be incurred in connection with any failure by the Company to obtain or maintain the
effectiveness of the Registration Statement, (C) one of the reasons for the Company and the
Investor reaching an agreement as to such amounts was the uncertainty and cost of litigation
regarding the question of actual damages, and D) the Company and the Investor are sophisticated
business parties and have been represented by sophisticated and able legal and financial counsel
and negotiated this Agreement at arm’s length. The Investor further agrees that, in the event that
the Company makes payments and/or deliveries on a timely basis of the amounts set forth in Sections
1.1(d) and/or 1.1(e), the Company’s deferral or suspension of the Registration Statement pursuant
to such Section 1.1(d) and/or 1.1(e) shall not constitute a material breach or default of the
Company’s obligations to the Investor and such payments and/or deliveries shall constitute the
Investor’s sole remedy in respect thereof.
(g) Additional Registration Statements. In the event and to the extent that the
Registration Statement fails to register a sufficient amount of Common Stock necessary for the
Company to issue and sell to the Investor and the Investor to purchase from the Company all of the
Registrable Securities to be issued, sold and purchased under the Purchase Agreement and the
Warrant, the Company shall, upon a timetable mutually agreeable to both the Company and the
Investor, prepare and file with the Commission an additional registration statement or statements
in order to effectuate the purpose of this Agreement, the Purchase Agreement, and the Warrant.
Such delay in registering such Registrable Securities shall not be subject to the payments by the
Company of the amounts set forth in Section 1.1(e) nor shall such delay constitute a material
breach or default of the Company’s obligations to the Investor.
ARTICLE II
REGISTRATION PROCEDURES
REGISTRATION PROCEDURES
Section 2.1 Filings; Information. The Company shall effect the registration with
respect to the sale of the Registrable Securities by the Investor in accordance with the intended
methods of disposition thereof. Without limiting the foregoing, the Company in each such case
will do the following as expeditiously as possible, but in no event later than the deadline,
if any, prescribed therefor in this Agreement:
(a) Subject to Section 1.1(e), the Company shall (i) prepare and file with the Commission the
Registration Statement; (ii) use commercially reasonable efforts to cause such filed Registration
Statement to become and to remain effective (pursuant to Rule 415 under the Securities Act or
otherwise); (iii) prepare and file with the Commission such amendments and supplements to the
Registration Statement and the Prospectus used in connection therewith as may be necessary to
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keep
such Registration Statement effective for the time period prescribed by Section 4.2 and in order to
effectuate the purpose of this Agreement, the Purchase Agreement, and the Warrant; and (iv) comply
with the provisions of the Securities Act with respect to the disposition of all securities covered
by such Registration Statement during such period in accordance with the intended methods of
disposition by the Investor set forth in such Registration Statement; provided, however, that the
Investor shall be responsible for the delivery of the Prospectus to the Persons to whom the
Investor sells the Shares and the Warrant Shares, and the Investor agrees to dispose of Registrable
Securities in compliance with the plan of distribution described in the Registration Statement and
otherwise in compliance with all applicable federal and state securities laws.
(b) The Company shall deliver to the Investor and its counsel, in accordance with the notice
provisions of Section 4.8, such number of copies of the Registration Statement, each amendment and
supplement thereto (in each case including all exhibits thereto), the Prospectus (including each
preliminary prospectus) and such other documents or information as the Investor or counsel may
reasonably request in order to facilitate the disposition of the Registrable Securities, provided,
however, that to the extent reasonably practicable, such delivery may be accomplished via
electronic means.
(c) After the filing of the Registration Statement, the Company shall promptly notify the
Investor of any stop order issued or threatened by the Commission in connection therewith and take
commercially reasonable actions required to prevent the entry of such stop order or to remove it if
entered.
(d) The Company shall use commercially reasonable efforts to (i) register or qualify the sale
of the Registrable Securities by the Investor under such other securities or blue sky laws of each
jurisdiction in the United States as the Investor may reasonably (in light of its intended plan of
distribution) request, and (ii) cause the sale of the Registrable Securities by the Investor to be
registered with or approved by such other governmental agencies or authorities in the United States
as may be necessary by virtue of the business and operations of the Company and do any and all
other customary acts and things that may be reasonably necessary or advisable to enable the
Investor to consummate the disposition of the Registrable Securities; provided, however, that the
Company will not be required to qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this Section 2.1(d), subject itself to taxation in any
such jurisdiction, consent or subject itself to general service of process in any such
jurisdiction, change any existing business practices, benefit plans or outstanding securities or
amend or otherwise modify the Certificate or Bylaws.
(e) The Company shall make available to the Investor (and will deliver to Investor’s counsel),
(i) subject to restrictions imposed by the United States federal government or any agency or
instrumentality thereof, copies of all public correspondence between the Commission and the Company
concerning the Registration Statement and will also make available for inspection by the Investor
and any attorney, accountant or other professional retained by the Investor (collectively, the
“Inspectors”), (ii) upon reasonable advance notice during normal business hours, all
financial and other records, pertinent corporate documents and properties of the Company
(collectively, the “Records”) as shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Company’s officers and employees to supply all
information reasonably requested by any Inspectors in connection with the Registration Statement;
provided,
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however, that (i) the Company shall not be obligated to disclose any portion of the
Records consisting of either (A) material non-public information or (B) confidential information of
a third party and (ii) any such Inspectors must agree in writing for the benefit of the Company not
to use or disclose any such Records except as provided in this Section 2.1(e). Records that the
Company determines, in good faith, to be confidential and that it notifies the Inspectors are
confidential shall not be disclosed by the Inspectors unless the disclosure or release of such
Records is requested or required pursuant to oral questions, interrogatories, requests for
information or documents or a subpoena or other order from a court of competent jurisdiction or
other judicial or governmental process; provided, however, that prior to any disclosure or release
pursuant to the immediately preceding clause, the Inspectors shall provide the Company with prompt
notice of any such request or requirement so that the Company may seek an appropriate protective
order or waive such Inspectors’ obligation not to disclose such Records; and, provided, further,
that if failing the entry of a protective order or the waiver by the Company permitting the
disclosure or release of such Records, the Inspectors, upon advice of counsel, are compelled to
disclose such Records, the Inspectors may disclose only that portion of the Records that counsel
has advised the Inspectors that the Inspectors are compelled to disclose; provided, however, that
upon any such required disclosure, such Inspector shall use his or her best efforts to obtain
reasonable assurances that confidential treatment will be afforded such information. The Investor
agrees that information obtained by it solely as a result of such inspections (not including any
information obtained from a third party who, insofar as is known to the Investor after reasonable
inquiry, is not prohibited from providing such information by a contractual, legal or fiduciary
obligation to the Company) shall be deemed confidential and shall not be used for any purposes
other than as indicated above or by it as the basis for any market transactions in the securities
of the Company or its affiliates unless and until such information is made generally available to
the public. The Investor further agrees that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the Company and allow the
Company, at its expense, to undertake appropriate action to prevent disclosure of the Records
deemed confidential.
(f) The Company shall otherwise comply in all material respects with the applicable rules and
regulations of the Commission, including, without limitation, compliance with applicable reporting
requirements under the Exchange Act.
(g) The Investor shall cooperate with the Company, as reasonably requested by the Company, in
connection with the preparation and filing of any Registration Statement hereunder. The Company
may require the Investor to promptly furnish in writing to the
Company such information as may be required in connection with such registration including,
without limitation, all such information as may be requested by the Commission, the NASDAQ Stock
Market or FINRA or any state securities commission and all such information regarding the Investor,
the Registrable Securities held by the Investor and the intended method of disposition of the
Registrable Securities. The Investor agrees to provide such information requested in connection
with such registration within five (5) business days after receiving such written request and the
Company shall not be responsible for, or incur any penalties under this Agreement with respect to,
any delays in obtaining or maintaining the effectiveness of the Registration Statement caused by
the Investor’s failure to timely provide such information.
(h) Upon receipt of a Blackout Notice from the Company, the Investor shall immediately
discontinue disposition of Registrable Securities pursuant to the Registration Statement
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covering
such Registrable Securities until (i) the Company advises the Investor that the Blackout Period has
terminated and (ii) the Investor receives copies of a supplemented or amended prospectus, if
necessary. If so directed by the Company, the Investor will deliver to the Company (at the expense
of the Company) or destroy (and deliver to the Company a certificate of destruction) all copies in
the Investor’s possession (other than a limited number of file copies) of the prospectus covering
such Registrable Securities that is current at the time of receipt of such notice.
Section 2.2 Registration Expenses. Except as set forth in Section 10.1 of the
Purchase Agreement, the Company shall pay all registration expenses incurred in connection with the
Registration Statement (the “Registration Expenses”), including, without limitation: (a)
all registration, filing, securities exchange listing and fees required by the NASDAQ Stock Market
LLC, (b) all registration, filing, qualification and other fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and disbursements of counsel in connection
with blue sky qualifications of the Registrable Securities), (c) all word processing, duplicating,
printing, messenger and delivery expenses, (d) the Company’s internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing legal or accounting
duties), (e) the fees and expenses incurred by the Company in connection with the listing of the
Registrable Securities, (f) reasonable fees and disbursements of counsel for the Company and
customary fees and expenses for independent certified public accountants retained by the Company
(including the expenses of any special audits or comfort letters or costs associated with the
delivery by independent certified public accountants of such special audit(s) or comfort letter(s),
(g) the fees and expenses of any special experts retained by the Company in connection with such
registration and amendments and supplements to the Registration Statement and Prospectus, and (h)
premiums and other costs of the Company for policies of insurance against liabilities arising out
of any public offering of the Registrable Securities being registered. Any fees and disbursements
of underwriters, broker-dealers or investment bankers, including without limitation underwriting
fees, discounts, transfer taxes or commissions, and any other fees or expenses (including legal
fees and expenses) if any, attributable to the sale of Registrable Securities, shall be payable by
each holder of Registrable Securities pro rata on the basis of the number of Registrable Securities
of each such holder that are included in a registration under this Agreement.
ARTICLE III
INDEMNIFICATION
INDEMNIFICATION
Section 3.1 Indemnification. The Company agrees to indemnify and hold harmless the
Investor, its partners, affiliates, officers, directors, employees and duly authorized agents, and
each Person or entity, if any, who controls the Investor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, together with the partners, affiliates, officers,
directors, employees and duly authorized agents of such controlling Person or entity (collectively,
the “Controlling Persons”), from and against any loss, claim, damage, liability, costs and
expenses (including, without limitation, reasonable attorneys’ fees and disbursements and costs and
expenses of investigating and defending any such claim) (collectively, “Damages”), joint or
several, and any action or proceeding in respect thereof to which the Investor, its partners,
affiliates, officers, directors, employees and duly authorized agents, and any Controlling Person,
may become subject under the Securities Act or otherwise, as incurred, insofar as such Damages (or
actions or proceedings in respect thereof) arise out of, or are based upon, any untrue statement or
alleged
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untrue statement of a material fact contained in any Registration Statement, or in any
preliminary prospectus, final prospectus, summary prospectus, amendment or supplement relating to
the Registrable Securities or arises out of, or are based upon, any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make the statements
therein under the circumstances not misleading, and shall reimburse the Investor, its partners,
affiliates, officers, directors, employees and duly authorized agents, and each such Controlling
Person, for any legal and other expenses reasonably incurred by the Investor, its partners,
affiliates, officers, directors, employees and duly authorized agents, or any such Controlling
Person, as incurred, in investigating or defending or preparing to defend against any such Damages
or actions or proceedings; provided, however, that the Company shall not be liable to the extent
that any such Damages arise out of the Investor’s (or any other indemnified Person’s) failure to
send or give a copy of the final prospectus or supplement (as then amended or supplemented) to the
persons asserting an untrue statement or alleged untrue statement or omission or alleged omission
at or prior to the written confirmation of the sale of Registrable Securities to such person if
such statement or omission was corrected in such final prospectus or supplement; provided, further,
that the Company shall not be liable to the extent that any such Damages arise out of or are based
upon an untrue statement or alleged untrue statement or omission or alleged omission made in such
Registration Statement, or any such preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Investor or any other person who participates as an underwriter
in the offering or sale of such securities, in either case, specifically stating that it is for use
in the preparation thereof. In connection with any Registration Statement with respect to which
the Investor is participating, the Investor will indemnify and hold harmless, to the same extent
and in the same manner as set forth in the preceding paragraph, the Company, each of its partners,
affiliates, officers, directors, employees and duly authorized agents, and each person or entity,
if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, together with the partners, affiliates, officers, directors, employees and
duly authorized agents of such controlling Person (each, a “Company Indemnified Person”)
against any Damages to which any Company Indemnified Person may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such
Damages arise out of or are based upon (a) any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement, or in any preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement relating to the Registrable Securities or
arise out of, or are based upon, any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein under the circumstances
not misleading to the extent that such violation occurs in reliance upon and in conformity with
written information furnished to the Company by the Investor or on behalf of the Investor expressly
for use in connection with such Registration Statement, or (b) any failure by the Investor to
comply with prospectus delivery requirements of the Securities Act, or any other failure to comply
with the Securities Act, the Exchange Act or any other law or legal requirement applicable to sales
under the Registration Statement.
Section 3.2 Conduct of Indemnification Proceedings. All claims for indemnification
under Section 3.1 shall be asserted and resolved in accordance with the provisions of Section 9.2
of the Purchase Agreement.
Section 3.3 Additional Indemnification. Indemnification similar to that specified in
the preceding paragraphs of this Article III (with appropriate modifications) shall be given by the
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Company and the Investor with respect to any required registration or other qualification of
Registrable Securities under any federal or state law or regulation of any governmental authority
other than the Securities Act. The provisions of this Article III shall be in addition to any
other rights to indemnification, contribution or other remedies which an indemnified party may
have pursuant to law, equity, contract or otherwise.
To the extent that any indemnification provided for herein is prohibited or limited by law,
the indemnifying party will make the maximum contribution with respect to any amounts for which it
would otherwise be liable under this Article III to the fullest extent permitted by law. However,
(a) no contribution will be made under circumstances where the maker of such contribution would not
have been required to indemnify the indemnified party under the fault standards set forth in this
Article III, (b) if the Investor is guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act), the Investor will not be entitled to contribution from any
Person who is not guilty of such fraudulent misrepresentation, and (c) contribution (together with
any indemnification obligations under this Agreement) by the Investor will be limited in amount to
the proceeds received by the Investor from sales of Registrable Securities.
ARTICLE IV
MISCELLANEOUS
MISCELLANEOUS
Section 4.1 No Outstanding Registration Rights. Except as otherwise disclosed in
accordance with the Purchase Agreement or in the Commission Documents, the Company represents and
warrants to the Investor that there is not in effect on the date hereof any agreement by the
Company pursuant to which any holders of securities of the Company have a right to cause the
Company to register or qualify such securities under the Securities Act or any securities or blue
sky laws of any jurisdiction.
Section 4.2 Term. The registration rights provided to the holders of Registrable
Securities hereunder, and the Company’s obligation to keep the Registration Statement effective,
shall terminate at the earlier of (a) such time that is two (2) years following the termination of
the Purchase Agreement, (b) such time as all Registrable Securities have been issued and have
ceased to be Registrable Securities, or (c) upon the consummation of an “Excluded Merger or
Sale” as defined in the Warrant. Notwithstanding the foregoing, Article III, Section 4.7,
Section 4.8, Section 4.9, Section 4.10 and Section 4.13 shall survive the termination of this
Agreement.
Section 4.3 Rule 144. The Company will, at its expense, promptly take such action as
holders of Registrable Securities may reasonably request to enable such holders of Registrable
Securities to sell Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144, as such Rule may be amended from time to
time, or (b) any similar rule or regulation hereafter adopted by the Commission. If at any time
the Company is not required to file reports under Section 13 or 15(d) of the Exchange Act, it will,
at its expense, forthwith upon the written request of any holder of Registrable Securities, make
available adequate current public information with respect to the Company within the meaning of
Rule 144(c)(1) or such other information to the extent necessary to permit sales pursuant to Rule
144. Upon the request of the Investor, the Company will deliver to the Investor a written
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statement, signed by the Company’s principal financial officer, as to whether it has complied with
such requirements.
Section 4.4 Certificate. The Company will, at its expense, forthwith upon the request
of any holder of Registrable Securities, deliver to such holder a certificate, signed by the
Company’s principal financial officer, stating (a) the Company’s name, address and telephone number
(including area code), (b) the Company’s Internal Revenue Service identification number, (c) the
Company’s Commission file number, (d) the number of shares of each class of Stock outstanding as
shown by the most recent report or statement published by the Company, and (e) whether the Company
has filed the reports required to be filed under the Exchange Act for a period of at least ninety
(90) days prior to the date of such certificate and in addition has filed the most recent annual
report required to be filed thereunder.
Section 4.5 Amendment and Modification. Any provision of this Agreement may be
waived, provided that such waiver is set forth in a writing executed the party to this Agreement
for the benefit of whom the provision being waived was intended. The provisions of this Agreement,
including the provisions of this sentence, may be amended, modified or supplemented, only with the
written consent of the Investor and the Company. No course of dealing between or among any Person
having any interest in this Agreement will be deemed effective to modify, amend or discharge any
part of this Agreement or any rights or obligations of any person under or by reason of this
Agreement.
Section 4.6 Successors and Assigns; Entire Agreement. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. The Company may assign this Agreement at any time in
connection with a sale or acquisition of the Company, whether by merger, consolidation, sale of all
or substantially all of the Company’s assets, or similar transaction, without the consent of the
Investor, provided that the successor or acquiring Person or entity agrees in writing to assume all
of the Company’s rights and obligations under this Agreement. Investor may assign
its rights and obligations under this Agreement only with the prior written consent of the
Company, and any purported assignment by the Investor absent the Company’s consent shall be null
and void. This Agreement, together with the Purchase Agreement and the Warrant sets forth the
entire agreement and understanding between the parties as to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any and every nature among
them.
Section 4.7 Severability. If any provision of this Agreement becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall
continue in full force and effect without said provision; provided that, if the severance of such
provision materially changes the economic benefits of this Agreement to either party as such
benefits are anticipated as of the date hereof, then such party may terminate this Agreement on
five (5) business days prior written notice to the other party. In such event, the Purchase
Agreement will terminate simultaneously with the termination of this Agreement.
Section 4.8 Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be given in accordance with Section 10.4 of
the Purchase Agreement.
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Section 4.9 Governing Law. This Agreement shall be construed under the laws of the
State of New York, without regard to principles of conflicts of law that would result in the
application of any law other than the laws of the State of New York.
Section 4.10 Headings. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall they affect their
meaning, construction or effect.
Section 4.11 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed to be an original instrument and all of which together shall
constitute one and the same instrument.
Section 4.12 Further Assurances. Each party shall cooperate and take such action as
may be reasonably requested by another party in order to carry out the provisions and purposes of
this Agreement and the transactions contemplated hereby.
Section 4.13 Absence of Presumption. This Agreement shall be construed without regard
to any presumption or rule requiring construction or interpretation against the party drafting or
causing any instrument to be drafted.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by the
undersigned, thereunto duly authorized, as of the date first set forth above.
| KINGSBRIDGE CAPITAL LIMITED |
||||
| By: | /s/ Xxxx Xxxxxxx-Xxxxxxx | |||
| Xxxx Xxxxxxx-Xxxxxxx | ||||
| Director | ||||
| SOMAXON PHARMACEUTICALS, INC. |
||||
| By: | /s/ Xxx X. XxXxxxxx | |||
| Name: | Xxx X. XxXxxxxx | |||
| Title: | Vice President and Chief Financial Officer | |||
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