EXHIBIT 10.14
REGISTRATION RIGHTS AGREEMENT
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This Agreement dated as of September 10, 1998 is entered into by and among
Inspire Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and
Kissei Pharmaceuticals Co., Ltd. (the "Purchaser").
WHEREAS, the Company and the Purchaser have entered into a Series C
Convertible Preferred Stock Purchase Agreement of even date herewith (the
"Purchase Agreement"); and
WHEREAS, the Company and the Purchaser desire to provide for certain
arrangements with respect to the registration of shares of capital stock of the
Company under the Securities Act of 1933;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
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shall have the following respective meanings:
"1997 Registration Rights Agreement" shall have the meaning set forth
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in Section 2(b).
"Commission" means the Securities and Exchange Commission, or any
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other Federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, $.001 par value per share, of
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the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
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or any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Registration Statement" means a registration statement filed by the
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Company with the Commission for a public offering and sale of Common Stock
(other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"Registration Expenses" means the expenses described in Section
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"Registrable Shares" means (i) the shares of Common Stock issued or
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issuable upon conversion of the Shares, (ii) any shares of Common Stock, and any
shares of Common Stock issued or issuable upon the conversion or exercise of any
other securities, and (iii) any other shares of Common Stock issued in respect
of such shares (because of stock splits, stock
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dividends, reclassifications, recapitalizations, or similar events); provided,
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however, that shares of Common Stock which are Registrable Shares shall cease to
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be Registrable Shares (i) upon any sale pursuant to a Registration Statement or
Rule 144 under the Securities Act or (ii) upon any sale in any manner to a
person or entity which, by virtue of Section 11 of this Agreement, is not
entitled to the rights provided by this Agreement. Wherever reference is made in
this Agreement to a request or consent of holders of a certain percentage of
Registrable Shares, the determination of such percentage shall include shares of
Common Stock issuable upon conversion of the Shares even if such conversion has
not yet been effected.
"Securities Act" means the Securities Act of 1933, as amended, or any
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similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
"Shares" shall have the meaning specified in Subsection 1.1(b) of the
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Purchase Agreement.
"Selling Stockholders" shall mean all stockholders who desire to sell
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shares of stock pursuant to registration rights granted under (i) this Agreement
and (ii) the 1997 Registration Rights Agreement.
"Stockholder" means the Purchaser and any persons or entities to whom
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the rights granted under this Agreement are transferred by the Purchaser, its
successors or assigns pursuant
to Section 11 hereof.
2. Incidental Registration
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a. Whenever the Company proposes to file a Registration Statement at
any time and from time to time, it will, prior to such filing, give written
notice to all Stockholders of its intention to do so and, upon the written
request of a Stockholder or Stockholders given within 20 days after the Company
provides such notice (which request shall state the intended method of
disposition of such Registrable Shares), the Company shall use its best efforts
to cause all Registrable Shares which the Company has been requested by such
Stockholder or Stockholders to register to be registered under the Securities
Act to the extent necessary to permit their sale or other disposition in
accordance with the intended methods of distribution specified in the request of
such Stockholder or Stockholders; provided that the Company shall have the right
to postpone or withdraw any registration effected pursuant to this Section 2
without obligation to any Stockholder.
b. In connection with any registration under this Section 2
involving an underwriting, the Company shall not be required to include any
Registrable Shares in such registration unless the holders thereof accept the
terms of the underwriting as agreed upon between the Company and the
underwriters selected by it (provided that such terms must be consistent with
this Agreement). If in the opinion of the managing underwriter it is appropriate
because of marketing factors to limit the number of Registrable Shares and other
shares of Common Stock of the Company (including shares of Common Stock issued
or issuable upon conversion of shares of any currently unissued series of
preferred stock of the Company) (the "Other Shares") with registration rights
granted pursuant to the Investors' Rights Agreement,
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dated as of April 8, 1997, by and among the Company and the Investors named
therein, as amended by Amendment No. 1 to Series B Convertible Preferred Stock
Purchase Agreement and Second Amended and Restated Stockholders' Agreement
effective as of June 30, 1997, and as further amended by Amendment No. 2 to
Series B Convertible Preferred Stock Purchase Agreement and Second Amended and
Restated Stockholders' Agreement effective as of September 9, 1997 (as amended,
the "1997 Registration Rights Agreement") to be included in the offering, then
the Company shall be required to include in the registration only that number
of Registrable Shares and Other Shares, if any, which the managing underwriter
believes should be included therein; provided that no persons or entities other
than the Company, the Stockholders and persons or entities holding registration
rights shall be permitted to include securities in the offering. If the number
of Registrable Shares and Other Shares to be included in the offering in
accordance with the foregoing is less than the total number of shares which the
holders of Registrable Shares and Other Shares have requested to be included,
then the number of Registrable Shares and Other Shares to be included in the
registration statement by holders of Registrable Securities and holders of Other
Shares shall be reduced by excluding first up to all shares proposed to be
included in the registration statement by holders of the Registrable Shares and
any further reduction shall be among the holders of Other Shares pursuant to the
provisions of the 1997 Registration Rights Agreement. If any holder would thus
be entitled to include more securities than such holder requested to be
registered, the excess shall be allocated among other requesting holders pro
rata based upon their total ownership of shares of Common Stock (giving effect
to the conversion into Common Stock of all securities convertible thereinto).
3. Registration Procedures. If and whenever the Company is required by
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the provisions of this Agreement to use its best efforts to effect the
registration of any of the Registrable Shares under the Securities Act, the
Company shall:
a. file with the Commission a Registration Statement with respect to
such Registrable Shares and use its best efforts to cause that Registration
Statement to become and remain effective;
b. as expeditiously as possible prepare and file with the Commission
any amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective, in the case of a firm commitment underwritten
public offering, until each underwriter has completed the distribution of all
securities purchased by it and, in the case of any other offering, until the
earlier of the sale of all Registrable Shares covered thereby or 120 days after
the effective date thereof;
c. as expeditiously as possible furnish to each selling Stockholder
such reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the selling Stockholder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares owned
by the selling Stockholder; and
d. as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the selling Stockholders shall
reasonably request, and do any and all other acts
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and things that may be necessary or desirable to enable the selling Stockholders
to consummate the public sale or other disposition in such states of the
Registrable Shares owned by the selling Stockholder; provided, however that the
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Company shall not be required in connection with this paragraph (d) to qualify
as a foreign corporation or execute a general consent to service of process in
any jurisdiction.
If the Company has delivered preliminary or final prospectuses to the
selling Stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling Stockholders and, if requested, the selling Stockholders
shall immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide the selling
Stockholders with revised prospectuses and, following receipt of the revised
prospectuses, the selling Stockholders shall be free to resume making offers of
the Registrable Shares.
4. Allocation of Expenses. The Company will pay all Registration Expenses
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of all registrations under this Agreement. For purposes of this Section 4, the
term "Registration Expenses" shall mean all expenses incurred by the Company in
complying with this Agreement, including, without limitation, all registration
and filing fees, exchange listing fees, printing expenses, fees and expenses of
counsel for the Company and the fees and expenses of one counsel selected by the
Selling Stockholders pursuant to the provisions of the 1997 Registration Rights
Agreement and this Agreement to represent all Selling Stockholders (whether
governed by the 1997 Registration Rights Agreement, or this Agreement, or both),
state Blue Sky fees and expenses, and the expense of any special audits incident
to or required by any such registration, but excluding underwriting discounts,
selling commissions and the fees and expenses of Selling Stockholders' own
counsel (other than the counsel selected to represent all Selling
Stockholders).
5. Indemnification and Contribution.
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a. In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, the Company will indemnify
and hold harmless the seller of such Registrable Shares, each underwriter of
such Registrable Shares, and each other person, if any, who controls such seller
or underwriter within the meaning of the Securities Act or the Exchange Act
against any losses, claims, damages or liabilities, joint or several, to which
such seller, underwriter or controlling person may become subject under the
Securities Act, the Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, or
arise out of or are based upon the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Company will reimburse such seller, underwriter
and each such controlling person for any legal or any other expenses reasonably
incurred by such seller, underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company
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will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any untrue statement or
omission made in such Registration Statement, preliminary prospectus or final
prospectus, or any such amendment or supplement, in reliance upon and in
conformity with information furnished to the Company, in writing, by or on
behalf of such seller, underwriter or controlling person specifically for use in
the preparation thereof.
b. In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, each seller of Registrable
Shares, severally and not jointly, will indemnify and hold harmless the Company,
each of its directors and officers and each underwriter (if any) and each
person, if any, who controls the Company or any such underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company, such directors
and officers, underwriter or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in reliance upon
and in conformity with information relating to such seller furnished in writing
to the Company by or on behalf of such seller specifically for use in connection
with the preparation of such Registration Statement, prospectus, amendment or
supplement; provided, however, that the obligations of such Stockholders
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hereunder shall be limited to an amount equal to the proceeds to each
Stockholder of Registrable Shares sold in connection with such registration.
c. Each party entitled to indemnification under this Section 5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided, that counsel for the Indemnifying
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Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
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give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 5. The Indemnified Party may participate in such
defense at such party's expense; provided, however, that the Indemnifying Party
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shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party shall
consent to entry of any
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judgment or settle such claim or litigation without the prior written consent of
the Indemnifying Party.
d. In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Registrable Shares exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 5 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 5 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling Stockholder or any such controlling
person in circumstances for which indemnification is provided under this Section
5; then, in each such case, the Company and such Stockholder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportions so that such holder
is responsible for the portion represented by the percentage that the public
offering price of its Registrable Shares offered by the Registration Statement
bears to the public offering price of all securities offered by such
Registration Statement, and the Company is responsible for the remaining
portion; provided, however, that, in any such case, (A) no such holder will be
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required to contribute any amount in excess of the proceeds to it of all
Registrable Shares sold by it pursuant to such Registration Statement, and (B)
no person or entity guilty of fraudulent misrepresentation, within the meaning
of Section 11 (f) of the Securities Act, shall be entitled to contribution from
any person or entity who is not guilty of such fraudulent misrepresentation.
6. Information by Holder. Each Stockholder including Registrable
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Shares in any registration shall furnish to the Company such information
regarding such Stockholder and the distribution proposed by such Stockholder as
the Company may reasonably request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
this Agreement.
7. "Stand-Off" Agreement. Each Stockholder, if requested by the
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Company and the managing underwriter of an offering by the Company of Common
Stock or other securities of the Company pursuant to a Registration Statement,
shall agree not to sell publicly or otherwise transfer or dispose of any
Registrable Shares or other securities of the Company held by such Stockholder
for a specified period of time (not to exceed 180 days) following the effective
date of such Registration Statement; provided,that:
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a. such agreement shall only apply to the first Registration
Statement covering Common Stock to be sold on its behalf to the public in an
underwritten offering; and
b. all Stockholders holding not less than the number of shares
of Common Stock held by such Stockholder (including shares of Common Stock
issuable upon the conversion of Shares, or other convertible securities, or upon
the exercise of options, warrants or rights) and all officers and directors of
the Company enter into similar agreements.
8. Rule 144 Requirements. After the earliest of (i) the closing of
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the sale of securities of the Company pursuant to a Registration Statement, (ii)
the registration by the
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Company of a class of securities under Section 12 of the Exchange Act, or (iii)
the issuance by the Company of an offering circular pursuant to Regulation A
under the Securities Act, the Company agrees to:
a. comply with the requirements of Rule 144(c) under the
Securities Act with respect to current public information about the Company;
b. use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); and
c. furnish to any holder of Registrable Shares upon request (i)
a written statement by the Company as to its compliance with the requirements of
said Rule 144(c), and the reporting requirements of the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), (ii) a copy of the most recent annual or quarterly report of the
Company, and (iii) such other reports and documents of the Company as such
holder may reasonably request to avail itself of any similar rule or regulation
of the Commission allowing it to sell any such securities without registration.
9. Mergers, Etc. The Company shall not, directly or indirectly, enter
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into any merger, consolidation or reorganization in which the Company shall not
be the surviving corporation unless the proposed surviving corporation shall,
prior to such merger, consolidation or reorganization, agree in writing to
assume the obligations of the Company under this Agreement, and for that purpose
references hereunder to "Registrable Shares" shall be deemed to be references to
the securities which the Stockholders would be entitled to receive in exchange
for Registrable Shares under any such merger, consolidation or reorganization;
provided, however, that the provisions of this Section 9 shall not apply in the
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event of any merger, consolidation or reorganization in which the Company is not
the surviving corporation if all Stockholders are entitled to receive in
exchange for their Registrable Shares consideration consisting solely of (i)
cash, (ii) securities of the acquiring corporation which may be immediately sold
to the public without registration under the Securities Act, or (iii) securities
of the acquiring corporation which the acquiring corporation has agreed to
register within 90 days of completion of the transaction for resale to the
public pursuant to the Securities Act.
10. Termination. All of the Company's obligations to register Registrable
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Shares under this Agreement shall terminate five (5) years after the closing of
a firm commitment underwritten public offering pursuant to an effective
registration statement under the, Securities Act of 1933, as amended, covering
the offer and sale of Common Stock for the account of the Corporation to the
public.
11. Transfers of Rights. This Agreement, and the rights and obligations of
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the Purchaser hereunder, may be assigned by the Purchaser to any person or
entity to which Shares are transferred by the Purchaser, and such transferee
shall be deemed a "Purchaser" for purposes of this Agreement; provided that the
transferee provides written notice of such assignment to the Company.
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12. General.
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a. Notices. All notices, requests, consents, and other
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communications under this Agreement shall be in writing and shall be delivered
by hand or mailed by first class certified or registered mail, return receipt
requested, postage prepaid:
If to the Company, at Inspire Pharmaceuticals, Inc., 0000 Xxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxx, XX 00000 XXX, Attention: President, or at such
other address or addresses as may have been furnished in writing by the Company
to the Purchaser; or
If to the Purchaser, at 19-48, Yoshino, Matsumoto-City, Nagano-Prefectuer,
399-8710 JAPAN, Attention: President, or at such other address or addresses as
may have been furnished to the Company in writing by the Purchaser.
Notices provided in accordance with this Section 12(a) shall be deemed
delivered upon personal delivery or two business days after deposit in the mail.
b. Entire Agreement. This Agreement embodies the entire agreement
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and understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
c. Amendments and Waivers. Any term of this Agreement may be
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amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the holders of at
least 50% of the Registrable Shares; provided, that this Agreement may be
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amended with the consent of the holders of less than all Registrable Shares only
in a manner which affects all Registrable Shares in the same fashion. No waivers
of or exceptions to any term, condition or provision of this Agreement, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, condition or provision.
d. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
e. Severability. The invalidity or unenforceability of any provision
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of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
f. Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the State of Delaware.
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Executed as of the date first written above.
COMPANY:
INSPIRE PHARMACEUTICALS, INC.
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx, M.D.
Vice Chairman
PURCHASER:
KISSEI PHARMACEUTICALS CO., LTD.
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
President and Chief Executive Officer
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