Exhibit 10.4
OSIRIS THERAPEUTICS, INC.
INVESTORS RIGHTS AGREEMENT
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May 25, 1994
TABLE OF CONTENTS
Page
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l. Registration Rights 1
1.1 Definitions 1
1.2 Request for Registration 2
1.3 Company Registration 4
1.4 Obligations of the Company 5
1.5 Furnish Information 6
1.6 Expenses of Demand Registration 6
1.7 Expenses of Company Registration 7
1.8 Underwriting Requirements 7
1.9 Delay of Registration 8
1.10 Indemnification 8
1.11 Reports Under Securities Exchange Act of 1934 10
1.12 Form S-3 Registration 11
1.13 Assignment of Registration Rights 12
1.14 [Reserved] 13
1.15 Termination of Registration Rights 13
2. Covenants of the Company, Confidentiality 13
2.1 Financial Statements and Other Information 13
2.2 Inspection of Property 15
2.3 Right of First Offer 15
2.4 Positive Covenants 17
2.5 Termination of Certain Covenants 18
2.6 Confidentiality 18
3. Miscellaneous 19
3.1 Successors and Assigns 19
3.2 Governing Law 19
3.3 Counterparts 19
3.4 Titles and Subtitles 20
3.5 Notices 20
3.6 Expenses 20
3.7 Amendments and Waivers 20
3.8 Severability 20
3.9 Entire Agreement 20
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INVESTORS' RIGHTS AGREEMENT
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THIS INVESTORS' RIGHTS AGREEMENT (the "Agreement") is made as of the 25th
day of May, 1994, by and between Osiris Therapeutics, Inc., a Delaware
corporation (the "Company"), Invesco Strategic Portfolios, Inc. - Health
Sciences Portfolio ("ISP") and The Global Health Sciences Fund ("GHS") (ISP
and GHS are referred to collectively herein as the "Investors" and sometimes
individually as an "Investor").
RECITALS
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WHEREAS, the Company and the Investors are parties to that certain Series
C Preferred Stock Purchase Agreement of even date herewith (the "Stock
Purchase Agreement");
WHEREAS, it is a condition to the closing of the transactions
contemplated by the Stock Purchase Agreement that the Company execute and
deliver this Agreement; and
WHEREAS, to induce the Investors to invest funds in the Company pursuant
to the Stock Purchase Agreement, the Investors and the Company hereby agree
that this Agreement shall govern the rights of the Investors to cause the
Company to register shares of Common Stock issuable to the Investors and
certain other matters as set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties agree as follows:
1. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Section 1:
(a) The term "Act" means the Securities Act of 1933, as amended.
(b) The term "Common Stock" means shares of the common stock of the
Company, par value $.001 per share.
(c) The term "Form S-3" means such form under the Act as in effect on
the date hereof or any registration form under the Act subsequently adopted
by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
(d) The term "Holder" means any person owning or having the right to
acquire Registrable Securities or any assignee thereof in accordance with
Section 1.13 hereof.
(e) The term "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(f) The term "Series C Preferred Stock" means shares of the Company's
Series C Convertible Preferred Stock, par value $.00l per share. The term
"Series Cl Preferred Stock" means shares of the Company's Series Cl
Convertible Preferred Stock, par value $.00l per share.
(g) The term "register", "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering
of effectiveness of such registration statement or document.
(h) The term "Registrable Securities" means (i) the Common Stock
issuable or issued upon conversion of the Series C Preferred Stock, (ii) the
Common Stock issuable or issued upon conversion of the Series Cl Preferred
Stock (iii) any Common Stock of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange
for or in replacement of the shares referenced in clauses (i) or (ii) above,
excluding in all cases, however, any Registrable Securities sold by a person
in a transaction in which his rights under this Section 1 are not assigned.
(i) The term "SEC" shall mean the United States Securities and
Exchange Commission.
1.2 Request for Registration.
(a) If the Company shall receive at any time after the earlier of (i)
four (4) years after the date of this Agreement or (ii) six (6) months after
the effective date of the first registration statement for a public offering
of securities of the Company (other than a registration statement relating
solely to the sale of securities to current or former employees, officers,
advisors, consultants or directors of the Company or any subsidiary of the
Company pursuant to a stock purchase plan or stock option or stock awards
approved by the Board of Directors of the Company or a registration statement
on Form S-4 or any similar successor form), a written request from the
Holders of fifty percent (50%) of the Registrable Securities then outstanding
that the Company file a registration statement under the Act covering the
registration of at least fifty percent (50%) of the Registrable Securities
then outstanding, the Company shall:
(i) within ten (10) days of the receipt thereof, give written
notice, in accordance with Section 3.5 hereof, of such request to all
Holders; and
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(ii) file as soon as practicable, and in any event within sixty
(60) days of the receipt of such request, and to use its best efforts to
cause to become effective as soon as practicable, a registration statement
under the Act covering all Registrable Securities which the Holders request
to be registered, subject to the limitations of Subsection 1.2(b).
(b) If the Holders initiating the registration request hereunder
("Initiating Holders") intend to distribute the Registrable Securities
covered by their request by means of an underwriting, they shall so advise
the Company as a part of their request made pursuant to Subsection 1.2(a) and
the Company shall include such information in the written notice referred to
in Subsection 1.2(a). The underwriter will be selected by the Company and
shall be reasonably acceptable to a majority in interest of the Initiating
Holders. In such event, the right of any Holder to include his Registrable
Securities in such registration shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein.
All Holders proposing to distribute their securities through such
underwriting shall (together with the Company as provided in Subsection
1.4(e)) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting. Notwithstanding
any other provision of this Section 1.2, if the underwriter advises the
Initiating Holders in writing that marketing factors require a limitation of
the number of shares to be underwritten, then the Initiating Holders shall so
advise all Holders of Registrable Securities which would otherwise be
underwritten pursuant hereto, and the number of shares of Registrable
Securities that may be included in the underwriting shall be allocated among
all Holders thereof, including the Initiating Holders, in proportion (as
nearly as practicable) to the amount of Registrable Securities of the Company
owned by each Holder; provided, however, that the number of shares of
Registrable Securities to be included in such underwriting shall not be
reduced unless all other securities are first entirely excluded from the
underwriting. Notwithstanding the foregoing, if the Company notifies the
Initiating Holders by a writing delivered within ten (10) days of its receipt
of the written request under Section 1.2(a) that the Company desires to sell
shares pursuant to such registration statement, then the Holders of
Registrable Securities shall not be deemed to have used one of their
registrations under this Section 1.2, and such Holders shall have the rights
provided in Section 1.3 with respect to such registration.
(c) Notwithstanding the foregoing, if the Company shall furnish to
the Initiating Holders a certificate signed by the Chief Executive Officer of
the Company stating that, in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company
and its stockholders for such registration statement to be filed and it is
therefore essential to defer the filing of such registration
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statement, the Company shall have the right to defer taking action with
respect to such filing for a period of not more than one hundred twenty (120)
days after receipt of the request of the Initiating Holders; provided,
however, that the Company may not utilize this right more than once in any
twelve (12) month period.
(d) In addition, the Company shall not be obligated to effect, or to
take any action to effect, any registration pursuant to this Section 1.2:
(i) After the Company has effected two (2) registrations
pursuant to this Section 1.2, excluding any registrations effected on Form
S-3, and such registrations have been declared or ordered effective;
(ii) If the Initiating Holders propose to dispose of shares of
Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 1.12 below; or
(iii) If the Company delivers to the Initiating Holders an
opinion, in form and substance acceptable to such Initiating Holders, of
counsel satisfactory to the Initiating Holders that the Registrable
Securities requested to be registered by the Initiating Holders may be sold
or transferred pursuant to Rule 144(k) of the Act.
1.3 Company Registration. If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Holders) any of its
stock or other securities under the Act in connection with the public
offering of such securities (other than a registration relating solely to the
sale of securities to current or former employees, officers, advisors,
consultants or directors of the Company or any subsidiary of the Company
pursuant to a stock purchase plan or stock option or stock awards approved by
the Board of Directors of the Company, a registration on Form S-4 or any
similar successor form, a registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities or a
registration in which the only Common Stock being registered is Common Stock
issuable upon conversion of debt securities which are also being registered),
the Company shall, at such time, promptly give each Holder written notice of
such registration. Upon the written request of each Holder given within
twenty (20) days after giving of such notice by the Company in accordance
with Section 3.5, the Company shall, subject to the provisions of Section
1.8, cause to be registered under the Act all of the Registrable Securities
that each such Holder has requested to be registered.
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1.4 Obligations of the Company. Whenever required under this Section 1
to effect the registration of any Registrable Securities, the Company shall,
as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and keep such registration
statement effective for a period of up to ninety (90) days or until the
distribution contemplated in the Registration Statement has been completed,
whichever first occurs; provided, however, that such ninety (90) day period
shall be extended for a period of time equal to the period the Holder
refrains from selling any securities included in such registration at the
request of an underwriter of Common Stock (or other securities) of the
Company, and provided further that in the case of any registration of
Registrable Securities on Form S-3 that are intended to be offered on a
continuous or delayed basis, such ninety (90) day period shall be extended
until the earlier of the date on which all such Registrable Securities are
sold and one hundred eighty (180) days after the effective date of such
registration statement.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as, in the opinion of counsel to the Company, may be
necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of
the Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue
Sky laws of such jurisdictions as shall be reasonably requested by the
Holders; provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions,
unless the Company is already subject to service in such jurisdiction and
except as may be required by the Act.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
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(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(g) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar
securities issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of
such registration.
1.5 Furnish Information.
(a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 1 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish
to the Company such information regarding itself, the Registrable Securities
held by it, and the intended method of disposition of such securities as
shall be required to effect the registration of such Holder's Registrable
Securities.
(b) The Company shall have no obligation with respect to any
registration requested pursuant to Section 1.2 or Section 1.12 if, due to the
operation of Subsection 1.5(a), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Company's
obligation to initiate such registration as specified in Subsection 1.2(a) or
Subsection 1.12(b)(2), whichever is applicable.
1.6 Expenses of Demand Registration. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, including
(without limitation) all registration, filing and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for the
Company and the reasonable fees and disbursements of one counsel for the
selling Holders shall be borne by the Company; provided, however, that the
Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 1.2 if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the
Registrable Securities to be
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registered (in which case all participating Holders shall bear such
expenses), unless the Holders of a majority of the Registrable Securities
agree to forfeit their right to one demand registration pursuant to Section
1.2 or unless such withdrawal is based upon material adverse information
relating to the Company that is different from information known to the
Holders requesting registration at the time of their request.
1.7 Expenses of Company Registration. The Company shall bear and pay all
expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 1.3 for each Holder, including (without limitation) all
registration, filing, and qualification fees, printers' and accounting fees
relating or apportionable thereto and the reasonable fees and disbursements
of one counsel for the selling Holders, but excluding underwriting discounts
and commissions relating to Registrable Securities.
1.8 Underwriting Requirements. In connection with any offering involving
an underwriting of shares of the Company's capital stock, the Company shall
not be required under Section 1.3 to include any of a Holder's securities in
such underwriting unless such Holder accepts the terms of the underwriting as
agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount
of securities, including Registrable Securities, requested by stockholders to
be included in such offering exceeds the amount of securities sold other than
by the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be
required to include in the offering only that number of such securities,
including Registrable Securities, which the underwriters determine in their
sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the Holders and the
holders of other securities entitled to be included in such underwriting
under the terms of any registration rights agreement with the Company,
according to the total amount of Registrable Securities or other such
securities entitled to be included therein owned by each Holder and other
holders or in such other proportions as shall be agreed to by a majority in
interest of the Holders and such other holders); provided, however, that in
the event that the Initiating Holders request a registration under Section
1.2 that is subsequently converted into a piggyback registration at the
election of the Company, as provided in Section 1.2(b), then the number of
Registrable Securities to be included in such a registration shall not be
reduced unless all other securities to be sold other than for the Company's
account are first entirely excluded from such registration.
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1.9 Delay of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.10 Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the officers and directors of each Holder
participating in such registration, any underwriter (as defined in the Act)
for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Act or the 1934 Act, against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Act, or the 1934 Act, or otherwise insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading, or (iii) any violation or
alleged violation by the Company of the Act, the 1934 Act, or any rule or
regulation promulgated under the Act, or the 1934 Act, and the Company will
pay to each such Holder, underwriter or controlling person, as incurred, any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
Subsection 1.10(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability, or action if such settlement is effected
without the consent of the Company, which consent shall not be unreasonably
withheld; and provided further, however, that the indemnity agreement
contained in this Subsection 1.10(a) shall not apply to the extent claims
made by a purchaser of Registrable Securities from a Holder are based upon
any untrue statement, or alleged untrue statement, made in or omission, or
alleged omission, from a preliminary prospectus if the Holder fails to comply
with its prospectus delivery obligations under the Act with respect to an
amendment or supplement to a prospectus, which amendment or supplement (x)
shall have been filed by the Company with the Commission, (y) shall have been
furnished to the Holder in a timely manner and in sufficient quantities, and
(z) shall not contain such statement, alleged statement, omission or alleged
omission, and if such purchaser of Registrable Securities shall not otherwise
have received a copy thereof at or prior to the written confirmation of such
sale to such person.
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(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any
other Holder selling securities in such registration statement and any
controlling person of any such underwriter or other Holder, against any
losses, claims, damages, or liabilities (joint or several) to which any of
the foregoing persons may become subject, under the Act, or the 1934 Act,
insofar as such losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case
to the extent (and only to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished by such Holder
expressly for use in connection with such registration; and each such Holder
will pay, as incurred, any legal or other expenses reasonably incurred by any
person intended to be indemnified pursuant to this Subsection 1.10(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement
contained in this Subsection 1.10(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; and provided, further, however, that in no
event shall any selling Holder's liability under this Subsection 1.10(b)
exceed the proceeds received by such Holder from the offering (net of any
underwriting discounts and commissions).
(c) Promptly after receipt by an indemnified party under this
Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.10,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party (together with all other indemnified parties which may be
represented without conflict by one counsel) shall have the right to retain
one separate counsel, with the fees and expenses to be paid by the
indemnifying party, 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 such indemnified party and
any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time
of the commencement of any such action shall not relieve such indemnifying
party of any liability to the indemnified party under this Section 1.10
except to the extent the indemnifying party was actually prejudiced by such
failure.
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(d) If the indemnification provided for in this Section 1.10 is held
by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred
to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable
by such indemnified party as a result of such loss, liability, claim, damage,
or expense in such proportion as is appropriate to reflect the relative fault
of the indemnifying party on the one hand and of the indemnified party on the
other in connection with the statements or omissions that resulted in such
loss, liability, claim, damage, or expense as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and
of the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative
intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and Holders under this Section
1.10 shall survive the completion of any offering of Registrable Securities
in a registration statement under this Section 1, and otherwise.
1.11 Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the Act
and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration
or pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public;
(b) take such action, including the voluntary registration of its
Common Stock under Section 12 of the 1934 Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities,
such action to be taken as soon as practicable after the end of the fiscal
year in which the first registration statement filed by the Company for
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the offering of its securities to the general public is declared effective;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the current public information condition of
SEC Rule 144 (at any time after ninety (90) days after the effective date of
the first registration statement filed by the Company), the Act and the 1934
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
such other reports and documents so filed by the Company, and (iii) such
other information as may be reasonably requested in availing any Holder of
any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such form.
1.12 Form S-3 Registration. In case the Company shall receive at any
time after the completion of the first registration statement for a public
offering of securities of the Company (other than a registration statement
relating solely to the sale of securities to current or former employees,
officers, advisors, consultants or directors of the Company or any subsidiary
of the Company pursuant to a stock purchase plan or stock option or
restricted stock awards approved by the Board of Directors of the Company or
a registration statement on Form S-4 or a similar successor form), a written
request from a Holder or Holders of Registrable Securities that the Company
effect a registration on Form S-3 and any related qualification or compliance
with respect to all or a part of the Registrable Securities owned by such
Holder or Holders, the Company will:
(a) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's
or Holders' Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other Holder or
Holders joining in such request as are specified in a written request given
within twenty (20) days after receipt of such written notice from the
Company; provided, however, that the Company shall not be obligated to effect
any such registration, qualification or compliance, pursuant to this Section
1.12: (1) if Form S-3 is not available for such offering by the Holders; (2)
if the Holders propose to sell Registrable
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Securities at an aggregate price to the public (net of any underwriting
discounts or commissions) of less than $1,000,000; (3) if the Company shall
furnish to the Holders a certificate signed by the President of the Company
stating that, in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its
shareholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form
S-3 registration statement for a period of not more than one hundred twenty
(120) days after receipt of the request of the Holder or Holders under this
Section 1.12; provided, however, that the Company shall not utilize this
right more than once in any twelve (12) month period; (4) if the Company has
already effected two (2) registrations on Form S-3, or any equivalent
successor form, for the Holders pursuant to this Section 1.12 within the
twelve months preceding such request; or (5) in any particular jurisdiction
in which the Company would be required to qualify to do business or to
execute a general consent to service of process in effecting such
registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities and other securities so
requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. All expenses incurred in connection with
a registration requested pursuant to this Section 1.12, including, without
limitation, all registration, filing, qualification, printers' and accounting
fees and the reasonable fees and disbursements of one (1) counsel for the
selling Holder or Holders and counsel for the Company, but excluding any
underwriting discounts or commissions associated with Registrable Securities,
shall be borne by the Company. Registrations effected pursuant to this
Section 1.12 shall not be counted as registrations effected pursuant to
Sections 1.2 or 1.3.
(d) The Company shall not be obligated to effect any registration
pursuant to this Section 1.12 if the Company delivers to the Holders
requesting registration under this Section 1.12 an opinion, in form and
substance acceptable to such Holders, of counsel satisfactory to such
Holders, that the Registrable Securities so requested to be registered may be
sold or transferred pursuant to Rule 144(k) under the Act.
1.13 Assignment of Registration Rights. The rights to cause the Company
to register Registrable Securities pursuant to this Section 1 may be assigned
(but only with all related obligations) by a Holder, in the case of a Holder
that is an investment company registered under the Investment Company Act of
1940, to another such investment company (a "Related Mutual Fund") that has
the same investment advisor as the transferring investment company, without
restriction or requirement as to number of shares, or to a transferee or
assignee of such securities who, as a result of such assignment or transfer,
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acquires at least 750,000 shares of Registrable Securities (subject
to appropriate adjustment for stock splits, combinations and similar events)
(in any such case, a "Permitted Assignee"), provided: (a) the Company
is, within a reasonable time after such transfer, furnished with written
notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
(b) such transferee or assignee agrees in writing to be bound by and subject
to the terms and conditions of this Agreement; and (c) such assignment shall
be effective only if immediately following such transfer the further
disposition of such securities by the transferee or assignee is restricted
under the Act.
1.14 [Reserved]
1.15 Termination of Registration Rights. No Holder shall be entitled to
exercise any right provided for in this Section 1 after five (5) years
following the consummation of the sale of securities pursuant to a
registration statement filed by the Company under the Act in connection with a
firm commitment underwritten offering of its securities to the general public
resulting in gross proceeds to the Company of at least $7,500,000 and at a
price per share to the public of at least $3.40 (as adjusted for stock splits,
combinations and similar events) (a "Qualified Public Offering").
2. Covenants of the Company, Confidentiality.
2.1 Financial Statements and Other Information. Except as otherwise set
forth below in this Section 2.1, until the Company is subject to the
reporting requirements of the 1934 Act, the Company will deliver to each of
the Investors, for so long as such Investor holds any shares of the Company's
Series C Preferred Stock or Series C1 Preferred Stock (or Common Stock issued
upon conversion thereof):
(a) as soon as available, but in any event within forty-five (45)
days after the end of each quarterly accounting period in each fiscal year,
unaudited consolidated statements of operations and consolidated cash flows
of the Company and its subsidiaries for such quarterly period and for the
period from the beginning of the fiscal year to the end of such quarter, and
consolidated balance sheets of the Company and its subsidiaries as of the end
of such quarterly period, setting forth in each case comparisons to the
annual budget and to the corresponding period in the preceding fiscal year,
all such statements to be prepared in accordance with generally accepted
accounting principles, consistently applied (except for the absence of notes
and subject to normal year-end adjustments);
(b) as promptly as possible (but in any event within one hundred
twenty (120) days) after the end of each fiscal year, (i) consolidated
statements of operations and a
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consolidated statement of cash flows of the Company and its subsidiaries for
such fiscal year and consolidated balance sheets and statements of
stockholders' equity of the Company and its subsidiaries as of the end of
such fiscal year, all prepared in accordance with generally accepted
accounting principles, consistently applied, and accompanied by an
unqualified opinion (except for qualifications regarding specified contingent
liabilities) of an independent accounting firm selected by the Company's
Board of Directors and (ii) to the extent not otherwise included in the
audited annual financial statements delivered pursuant to the preceding
clause (i), unaudited comparisons to budget and the preceding fiscal year;
(c) prior to the end of each fiscal year, an annual budget (approved
by the Board of Directors) prepared on a monthly, consolidated basis for the
Company and its subsidiaries for the succeeding fiscal year (displaying
detailed anticipated statements of operations and cash flows and balance
sheets), and promptly upon preparation thereof any other significant budgets
which the Company prepares and any revisions of such annual or other budgets;
(d) promptly (and in any event within thirty (30) days) after the
discovery or receipt of notice of any event or circumstance affecting the
Company or its subsidiaries that is determined in good faith by the Company
to be material to the Company and its subsidiaries, taken as a whole, a
letter from the Chief Executive Officer or Chief Financial Officer of the
Company specifying the nature and period of existence thereof and, in the
case of material litigation, what actions the Company and its subsidiaries
have taken and propose to take with respect thereto;
(e) promptly after transmission thereof, copies of all financial
statements, proxy statements, reports and any other written communications
which the Company sends to its stockholders generally and copies of all
regular, special or periodic reports which it files with the SEC or with any
securities exchange on which any of its securities are then listed, and
copies of all press releases and other statements made available generally by
the Company to the public;
(f) a notice specifying the terms of all sales of the Company's
securities, promptly following the consummation thereof (other than issuances
to officers, directors, advisors, employees or consultants approved by the
Company's Board of Directors);
(g) commencing in fiscal 1995, within fifteen (15) days after the
end of each month, an income statement for such month and a balance sheet of
the Company for and as of the end of such month, with comparisons to budget,
together with such other business and financial data as may be reasonably
requested by each Investor;
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(h) notice of the effectiveness under the Act of the registration
covering the Company's initial public offering, such notice to be provided by
telecopier immediately following the SEC's notification to the Company of
such effectiveness; and
(i) notice as to whether the Company continues to meet the active
business requirements of Section 1202 of the Internal Revenue Code, such
notice to be given (x) annually at the time of the delivery of the audited
financial statements pursuant to paragraph (a) above, (y) promptly following
the written request of an Investor and (z) at such time as facts come to the
Company's attention that lead it to reasonably believe it no longer meets
such requirements.
Each of the financial statements referred to in this Section 2.1 will
fairly present in all material respects the Company's consolidated financial
position and results of operations as of the dates and for the periods stated
therein, subject in the case of the unaudited financial statements to changes
resulting from normal year-end audit adjustments (none of which would, alone
or in the aggregate, be materially adverse to the Company's financial
condition, operating results or business prospects). The Company's
obligation to provide to the Investors the materials described in Subsection
(e) above will continue after the Company is subject to the reporting
requirements of the 1934 Act until the Investors no longer hold any shares of
the Company's Series C Preferred Stock or Series C1 Preferred Stock (or
Common Stock issued upon conversion thereof).
2.2 Inspection of Property. Until the Company is subject to the
reporting requirements of the 1934 Act, the Company will permit the
Investors, or any representatives designated by either of the Investors, upon
reasonable notice and during normal business hours and such other times as
either of the Investors may reasonably request, to (i) visit and inspect any
of the properties of the Company and its subsidiaries, (ii) examine the
corporate and financial records of the Company and its subsidiaries and make
copies thereof or extracts therefrom, (iii) discuss the affairs, finances and
accounts of the Company and its subsidiaries with the directors, senior
management and independent accountants of the Company and its subsidiaries,
and (iv) consult with and advise the management of the Company and its
subsidiaries as to their affairs, finances and accounts. The Company may, as
a condition to any inspection or visit by an Investor or its representative
pursuant to this Section 2.2, require such Investor or representative to
execute and deliver a confidentiality agreement reasonably acceptable to the
Company.
2.3 Right of First Offer. Subject to the terms and conditions specified
in this Section 2.3, the Company hereby grants to each Holder a right of
first offer with respect to future sales by the Company of its Shares (as
hereinafter defined). A Holder shall be entitled to apportion the right of
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first offer hereby granted it among itself and its affiliates and, in the
case of a Holder that is a registered investment company, among itself and
its Related Mutual Funds, in such proportions as it deems appropriate.
Each time the Company proposes to offer any shares of, or securities
convertible into or exercisable for any shares of, any class of its capital
stock ("Shares") in a transaction the primary purpose of which (as determined
in good faith by the Board of Directors of the Corporation) is to raise
capital, the Company shall first make an offering of such Shares to each
Holder in accordance with the following provisions:
(a) The Company shall deliver a notice by certified mail ("Notice")
to the Holders stating (i) its bona fide intention to offer such Shares, (ii)
the number of such Shares to be offered, and (iii) the price and terms, if
any, upon which it proposes to offer such Shares.
(b) By written notification received by the Company, within twenty
(20) calendar days after giving of the Notice, the Holder may elect to
purchase or obtain, at the price and on the terms specified in the Notice, up
to that portion of such Shares which equals the proportion that the number of
shares of Common Stock issued and held, or issuable upon conversion of the
Series C Preferred Stock and Series C1 Preferred Stock then held, by such
Holder bears to the total number of shares of Common Stock of the Company
then outstanding (assuming full conversion of all convertible securities)
("Pro Rata Share") plus up to a specified number of Shares not subscribed for
by other Holders or other persons receiving the opportunity to subscribe for
the Shares. The closing of the purchase and sale of the Shares subscribed
for shall take place within thirty-five (35) days of the giving of the
Notice. To the extent a Holder does not elect to purchase or obtain the full
amount of its Pro Rata Share, the unsubscribed portion of such Holder's Pro
Rata Share may be purchased or obtained by any other Holder or Holders, on a
pro rata basis, at the price and on the terms specified in the Notice,
provided that such purchase shall be consummated within such thirty-five (35)
day period and provided further, however, that the Company shall not be
required to provide any additional notice offering the unsubscribed Shares to
the Holders.
(c) If all Shares referred to in the Notice which Holders are
entitled to purchase pursuant to Subsection 2.3(b) are not elected to be
purchased as provided in Subsection 2.3(b) hereof, the Company may, during
the one hundred (180) day period following the expiration of the period
provided in Subsection 2.3(b) hereof, offer the remaining unsubscribed
portion of such Shares to any person or persons at a price not less than, and
upon principal terms no more favorable to the offeree than those specified in
the Notice. If the Company does not enter into an agreement for the sale of
the Shares within such period, or if such agreement is not consummated within
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thirty (30) days of the execution thereof, the right provided hereunder shall
be deemed to be revived and such Shares shall not be offered unless first
reoffered to the Holders in accordance herewith.
(d) The right of first offer in this Section 2.3 shall not be
applicable to
(i) shares of Common Stock to be issued to current or former
employees, officers, advisors, consultants or directors of the Company or its
subsidiaries directly or pursuant to a stock purchase plan or stock option or
stock awards approved by the Board of Directors of the Company;
(ii) Common Stock issued or issuable upon conversion of the
Company's Series A Convertible Preferred Stock, Series B Convertible
Preferred Stock, Series C Preferred Stock or Series C1 Preferred Stock or any
other convertible securities issued in compliance with this Section 2.3; or
(iii) Common Stock issued by the Company in connection with:
(x) the issuance of senior indebtedness to financial institutions, (y)
equipment or other leases approved by the Board of Directors, (z) any
acquisition of licenses or other rights, assets or technology from third
parties or corporate partnering arrangements or acquisition of another
entity, provided that in any such case such issuance is approved by the Board
of Directors of the Company.
2.4 Positive Covenants. So long as any shares of the Preferred Stock
are outstanding, the Company agrees as follows:
(a) The Company will retain independent public accountants of
recognized national or regional standing who shall certify the Company's
financial statements at the end of each fiscal year. In the event the
services of the independent public accountants so selected, or any firm of
independent public accountants hereafter employed by the Company, are
terminated, the Company will promptly thereafter notify the Holders and will
request the firm of independent public accountants whose services are
terminated to deliver to the Holders a letter from such firm setting forth
the reasons for the termination of their services. In the event of such
termination, the Company will promptly thereafter engage another firm of
independent public accountants of recognized national or regional standing.
In its notice to the Holders the Company shall state whether the change of
accountants was recommended or approved by the Board of Directors of the
Company or any committee thereof.
(b) The Company will cause senior management personnel and key
employees now or hereafter employed by it or any subsidiary to enter into an
agreement with respect to proprietary information and inventions.
-17-
(c) The Company's Board of Directors will meet at least once every
fiscal quarter.
(d) The Company shall, promptly following the date of this
Agreement, obtain, and thereafter maintain in full force and effect, fire,
casualty, workmen's compensation and liability insurance policies, with
extended coverage, in such amounts and with such coverage as are carried by
companies in a position similar to that of the Company.
(e) The Company shall maintain in full force and effect key-man life
insurance policies on the lives of each of ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ in
the amount of at least $1,000,000. The Company shall promptly obtain, and
thereafter maintain in full force and effect, a key-man life insurance policy
on the life of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ in the amount of at least $1,000,000,
provided that such insurance is available on commercially reasonable terms.
(f) The Company shall promptly take all action necessary to reduce
the number of authorized shares of its Series A Convertible Preferred Stock
from 12,300,000 shares to 8,274,500 shares.
2.5 Termination of Certain Covenants. The covenants set forth in
Section 2.4 shall terminate and be of no further force or effect upon the
consummation of a Qualified Public Offering.
2.6 Confidentiality.
(a) Each of the Investors agrees that any financial, legal, business
or technical information disclosed to it by the Company or any of its
representatives whether before or after the date hereof, shall be considered
confidential and proprietary, if it is conspicuously labeled as
"Confidential" or "Proprietary" or ,if disclosed orally, it is identified at
the outset as confidential or proprietary or is identified as such in writing
promptly after disclosure. The Investor shall not disclose such confidential
information to any third party (other than its employees, agents, auditors,
representatives and others who need to know such information and to
representatives of regulatory agencies ("Authorized Recipients")), and shall
hold such information in confidence and not use it other than for evaluating
and monitoring its investment in the Company. Such confidential and
proprietary information shall include, without limitation, marketing and
sales information, commercialization plans and information such as patent
applications, inventions, trade secrets, systems, methods, apparatus,
designs, tangible material, and products and derivatives thereof if it is
labeled or identified "confidential" as set forth above. Each Investor shall
cause its respective Authorized Recipients to comply with the confidentiality
and nonuse covenants and agreements of such
-18-
Investor and shall be responsible for any breach thereof by its Authorized
Recipients.
(b) The above obligations of confidentiality shall not be applicable
to the extent:
(i) such information is currently public knowledge or becomes
public knowledge through no fault of an Investor or its Authorized Recipients;
(ii) such information is in the possession of the Investor prior
to the disclosure to it by the Company; or
(iii) such information is rightfully acquired from a third
party with no restrictions on its disclosure or use; or
(iv) the Investor is legally compelled by an order of a court
of competent jurisdiction to disclose such information to such court, but
only after such Investor has given notice of such order; or
(v) the Investor has received the express consent from an
authorized officer of the Company to disclose or use such information.
3. Miscellaneous.
3.1 Successors and Assigns. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities). Notwithstanding the
foregoing, the rights contained in Sections 2.1 and 2.2 may not be assigned
by an Investor to any party other than a Related Mutual Fund without the
Company's prior written consent, which shall not be unreasonably withheld.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement.
3.2 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Delaware, disregarding Delaware principles of
conflicts of laws which would otherwise provide for the application of the
substantive laws of another jurisdiction.
3.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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3.4 Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
3.5 Notices. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or five
(5) days after deposit with the United States Post Office or air courier in
the case of non-U.S. parties, by registered or certified mail, postage
prepaid and addressed to the party to be notified at the address indicated
for such party on the signature page hereof, or at such other address as such
party may designate by ten (10) days' advance written notice to the other
parties.
3.6 Expenses. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
3.7 Amendments and Waivers. Any term of this Agreement may be 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), only with the written consent of the Company and the holders
of two-thirds of the Registrable Securities then outstanding. Any amendment
or waiver effected in accordance with this Section 3.7 shall be binding upon
each holder of any Registrable Securities then outstanding, each future
holder of all such Registrable Securities, and the Company.
3.8 Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with
its terms.
3.9 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement among the parties with regard to the subject
matter hereof.
[The remainder of this page has been intentionally left blank.]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
OSIRIS THERAPEUTICS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Address: Wearn Building, 4th Floor
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: President
INVESTORS:
INVESCO STRATEGIC PORTFOLIOS, INC. -
HEALTH SCIENCES PORTFOLIO
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Secretary
------------------------------
Address: c/o Invesco Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Director of Private Placements
THE GLOBAL HEALTH SCIENCES FUND
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Title: Secretary
------------------------------
Address: c/o Invesco Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Director of Private Placements
CO-SALE AGREEMENT
This CO-SALE AGREEMENT (the "Agreement"), is made as of the 25th day of
May, 1994, by and among Osiris Therapeutics, Inc., a Delaware corporation
(the "Company"), ▇▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Eden ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇; ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ (such persons are referred to individually herein
as a "Founder" and collectively as the "Founders") Invesco Strategic
Portfolios, Inc. - Health Sciences Portfolio ("ISP") and The Global Health
Sciences Fund ("GHS") (ISP and GHS are referred to collectively herein as the
"Investors" and sometimes individually as an "Investor").
WHEREAS, the Company has agreed to sell, and the Investors have severally
agreed to purchase, shares of the Company's Series C Convertible Preferred
Stock, par value $.001 per share (the "Series A Preferred Stock") pursuant to
a Stock Purchase Agreement dated as of the date hereof by and between the
Company and the Investors (the "Stock Purchase Agreement");
WHEREAS, the Series C Preferred Stock is convertible into shares of the
Company's Common Stock, par value $.00l per share ("Common Stock");
WHEREAS, the Founders own shares of the Company's Common Stock;
WHEREAS, it is a condition to the closing of the transactions
contemplated by the Stock Purchase Agreement that each of the Founders and
the Company has executed and delivered this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the agreements set
forth below, and other good and valuable consideration, the receipt, adequacy
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
l. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following respective meanings:
(a) "Founder Shares" shall mean and include all shares of the
Company's capital stock now owned or hereafter acquired by the Founders,
including all other securities of the Company which may be issued to such
Founders in exchange for or in respect of such shares (whether by way of
stock split, stock dividend, combination, reclassification, reorganization,
or any other means).
(b) "Investors' Shares" shall mean and include all shares of the Company's
capital stock now owned or hereafter acquired by the Investors, including all
other securities of the Company which may be issued to the Investors in
exchange for or in respect of such shares (whether by way of stock split,
stock dividend, combination, reclassification, reorganization, or any other
means).
2. Prohibited Transfers. No Founder shall sell, assign, transfer,
pledge, hypothecate, mortgage, encumber or dispose of all or any of his or
its Founder Shares except to the Company or in accordance with the terms of
this Agreement, including Section 3 hereof. Notwithstanding the foregoing:
(i) a Founder may, following notice to the Company and the Investors,
transfer all or any of his Founder Shares to another Founder (it being
acknowledged and agreed that all such Founder Shares shall remain subject to
the restrictions of this Agreement following such transfer); and (ii) a
Founder may transfer all or any of his Founder Shares by way of gift to any
member of his family or to any trust for the benefit of any such family
member or the Founder, or by will or the laws of descent and distribution;
provided that (A) the transferring Founder shall inform the Investors and the
Company of such transfer or gift prior to effecting it and (B) the transferee
or donee shall furnish the Company and the Investors with a written agreement
to be bound by and comply with all provisions of this Agreement and any other
applicable agreements to the same extent as if such transferee were the
Founder. Such transferred Founder Shares shall remain "Founder Shares"
hereunder, and such transferee or donee shall be treated as a "Founder", for
purposes of this Agreement. As used herein, the word "family" shall include
any spouse, lineal ancestor or descendant, brother or sister.
3. Right of Co-Sale Restricting Shares.
(a) Right of Co-Sale in Favor of Investors.
(1) Subject to any right of first refusal in favor of the
Company, if any Founder proposes to sell or transfer any Founder Shares
(whether or not subject to repurchase by the Company) by him in one or more
related transactions, then, with the exception of a transfer or sale pursuant
to Section 2 or Subsection 3(c)(1) hereof, such Founder shall promptly give
written notice (the "Founder Notice") to the Investors and the Company at
least twenty (20) days prior to the closing of such sale or transfer. The
Founder Notice shall describe in reasonable detail the proposed sale or
transfer including, without limitation, the number of Founder Shares to be
sold or transferred, the nature of such sale or transfer, the consideration
to be paid, and the name and address of each prospective purchaser or
transferee.
(2) Each Investor that elects to participate in a sale of Founder Shares
under this Section 3 (an "Investor
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Participant") may sell all or any part of that number of Investors' Shares
equal to the product obtained by multiplying (i) the aggregate number of
Founder Shares covered by the Founder Notice by (ii) 16.8% in the case of
GHS, and 18.2% in the case of ISP.
(3) Each Investor Participant shall effect its participation in
the sale by promptly delivering to the selling Founder for transfer to the
prospective purchaser one or more certificates, properly endorsed for
transfer, which represent:
(i) at least the number of shares of Common Stock that such
Investor Participant is entitled and elects to sell; or
(ii) at least that number of shares of Series C Preferred
Stock which is at such time convertible into the number of shares of Common
Stock which such Investor Participant is entitled and elects to sell. In the
alternative, the Founder may require the Investor Participant to sell its
shares directly to the purchaser named in the Founder Notice. If the Founder
so elects, he shall so indicate in the Founder Notice and shall assign to
each Participating Investor so much of the Founder's interest in the
agreement of sale as the Participating Investor shall be entitled and shall
require the proposed purchaser to consent to such assignment, if necessary.
(4) The stock certificate or certificates to be delivered by
Investor Participant as specified in Subsection 3(a) (3) shall be transferred
to the prospective purchaser upon consummation of the sale of the Founder
Shares pursuant to the terms and conditions specified in the Founder Notice,
and the selling Founder, unless he has made the election described in the
preceding paragraph (3) shall concurrently therewith remit to such Investor
Participant that portion of the sale proceeds to which such Investor
Participant is entitled by reason of its participation in such sale. To the
extent that any prospective purchaser or purchasers prohibits such assignment
or otherwise refuses to purchase shares or other securities from an Investor
Participant, the selling Founder shall not sell to such prospective purchaser
or purchasers any Founder Shares unless and until, simultaneously with such
sale, the selling Founder shall purchase such shares or other securities from
such Investor Participant. In addition, the Founder shall not be required to
purchase any shares or remit any proceeds to a Participating Investor if the
proposed sale fails to be consummated for any reason.
(5) The Investors' exercise or non-exercise of the right to
participate in one or more sales of Founder Shares made by a Founder shall
not adversely affect their rights as to subsequent sales of Founder Shares
subject to this Section 3(a).
-3-
(6) Subject to the rights of the Investors that have elected to
participate in the sale of Founder Shares, the selling Founder may, not later
than sixty (60) days following delivery to the Company and each of the
Investors of the Founder Notice, conclude a transfer of any or all of the
Founder Shares covered by the Founder Notice on terms and conditions not
materially more favorable to the Founder different from those described in
the Founder Notice. Any proposed transfer on terms and conditions materially
more favorable to the Founder than those described in the Founder Notice, as
well as any subsequent proposed transfer of any of the Founder Shares by the
selling Founder, shall again be subject to the co-sale rights of the
Investors and shall require compliance by the Founder with the procedures
described in this Section 3(a).
(b) Termination of Right of Co-Sale. Notwithstanding anything in this
Section 3 to the contrary, the right of co-sale described in Section 3(a)
shall terminate upon the earlier of (i) the closing of a firm commitment
underwritten public offering pursuant to an effective registration statement
on Form S-l under the Act, covering the offer and sale of the Company's
Common Stock to the general public resulting in gross proceeds to the Company
of at least $7,500,000 and at a price per share to the public of at least
$3.40 (as appropriately adjusted for stock splits, stock dividends,
combinations, reclassifications and similar events) (a "Qualified Public
Offering"); or (ii) the closing of the Company's sale of all or substantially
all of its assets or the acquisition of the Company by another entity by
means of merger or consolidation resulting in the exchange of the outstanding
shares of the Company's capital stock for securities or consideration issued,
or caused to be issued, by the acquiring entity or its subsidiary.
(c) Exempt Transfers.
(1) Notwithstanding the foregoing, the provisions of Section 3
shall not apply to the sale of any Founder Shares (i) to the public pursuant
to a registration statement filed with, and declared effective by, the
Securities and Exchange Commission under the Act; (ii) to the Company at
cost; or (iii) in connection with the INVESTORS exercise of their co-sale
right granted pursuant to Section 3(a) hereof.
(2) This Section 3 shall in no manner limit the right of the
Company to repurchase securities from a Founder, consultants, employees or
directors pursuant to its repurchase rights set forth in applicable stock
restriction, repurchase or other agreements.
(d) Prohibited Transfers. Any attempt by a Founder to transfer
Founder Shares in violation of Section 3 hereof shall be void and the Company
agrees it will not effect
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such a transfer nor will it treat any alleged transferee as the holder of
such shares.
(e) Assignabilitv of Rights. The co-sale rights granted to the
Investors herein shall be assignable only (i) to an assignee or transferee
who, as a result of such assignment, acquires at least 100,000 Investors,
Shares (subject to adjustment for stock splits, stock dividends,
combinations, reclassifications or similar events); or (ii) as to assignments
by an Investor, to another Investor or to an investment company registered
under the Investment Company Act of 1940 that has the same investment advisor
as the transferring Investor. In the event of any such assignment, the
applicable percentage specified in Section 3(a)(2)(ii) shall be allocated
ratably between the Investor and its assignee or transferee.
(f) Stock Split. All references to numbers of shares in this Section
3 shall be appropriately adjusted to reflect any stock dividend, split,
combination or other recapitalization of shares by the Company occurring
after the date of this Agreement.
4. Term. This Agreement shall terminate as set forth in Section 3(b).
5. Equitable Remedies. Without limiting the rights of each party hereto
to pursue all other legal and equitable rights available to such party for
any other party's failure to perform its obligations under this Agreement,
each such party acknowledges and agrees that the remedy at law for any
failure to perform obligations hereunder would be inadequate and all such
parties shall be entitled to specific performance, injunctive relief or other
equitable remedies in the event of any such failure.
6. Legend. Each certificate evidencing any of the Shares shall bear a
legend substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND
MAY NOT BE SOLD, EXCHANGED, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF EXCEPT IN ACCORDANCE WITH AND SUBJECT TO
ALL THE TERMS AND CONDITIONS OF A CERTAIN
CO-SALE AGREEMENT DATED AS OF MAY 19, 1994, A
COPY OF WHICH THE CORPORATION WILL FURNISH TO
THE HOLDER OF THIS CERTIFICATE UPON REQUEST
AND WITHOUT CHARGE."
7. Notices. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or five
(5) days after deposit with the United States Post Office or air courier in
the
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case of non-U.S. parties, by registered or certified mail, postage prepaid
and addressed to the party to be notified at the address indicated for such
party on the signature page hereof, or at such other address as such party
may designate by ten (10) days advance written notice to the other parties.
8. Entire Agreement; Amendments. This Agreement constitutes the full and
entire understanding and agreement among the parties with regard to the
subject matter hereof. Any term of this Agreement may be 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), only
with the written consent of the Company, the holders of at least two-thirds
of the Common Stock issued or issuable upon conversion of the Series C
Preferred Stock and the holders of a majority of the outstanding Founder
Shares. Any amendment or waiver effected in accordance with this Section 8
shall be binding upon each holder of any such securities at the time
outstanding (including securities into which such securities are
convertible), each future holder of such securities and the Company.
9. Governing Law; Successors and Assigns. This Agreement shall be
governed by and construed under the laws of the State of Ohio, disregarding
any Ohio principles of conflicts of laws that would otherwise provide for the
application of the substantive laws of another jurisdiction. Except as
otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties (including transferees of any shares of Series C
Preferred Stock or any shares of Common Stock issued upon conversion
thereof). Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations or liabilities under
or by reason of this Agreement.
10. Expenses. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
11. Waivers. No waiver of any breach or default hereunder shall be
considered valid unless in writing, and no such waiver shall be deemed a
waiver of any subsequent breach or default of the same or similar nature.
12. Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted as
if such provision were so excluded and shall be enforceable in accordance
with its terms.
-6-
13. Captions. Captions are for convenience only and are not deemed to be
part of this Agreement.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[The remainder of this page has been intentionally left blank.]
-7-
IN WITNESS WHEREOF, this Agreement has been executed as of the date and
year first above written.
OSIRIS THERAPEUTICS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: President
--------------------------------
Address: Wearn Building,
4th Floor
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: President
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Address: c/o Osiris Therapeutics
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Address: CWRU
EDEN ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Address: Pursuant to power of attorney
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Address: Pursuant to power of attorney
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Address: Pursuant to power of attorney
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Address: Pursuant to power of attorney
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Address:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Address:
INVESCO STRATEGIC PORTFOLIOS,
INC. - HEALTH SCIENCES PORTFOLIO
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Secretary
---------------------------------
Address: c/o Invesco Trust Company
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Director of
Private Placements
THE GLOBAL HEALTH SCIENCES FUND
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Secretary
---------------------------------
Address: c/o Invesco Trust Company
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Director of
Private Placements
May 25, 1994
Global Health Scientist Fund
Investco Strategic Portfolio Inc-Health Scientist
Portfolio
c/o Investco Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
As of the date hereof I have signed that certain Co-Sale Agreement among
Osiris Therapeutics Inc., each of you, and certain other parties on behalf of
my wife and my children pursuant to a Power of Attorney that I will obtain
from each of them promptly after the date hereof. Prior to signing the
Co-Sale Agreement I have discussed the Power of Attorney with my wife and
children and they are willing to sign a written Power of Attorney to evidence
my authority to sign on their behalf.
Sincerely,
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
VMG/co