Exhibit 10.6
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made by and
between Osiris Therapeutics, Inc. (the "Company") and the undersigned
("Investor").
RECITALS
A. The Investor desires to purchase from the Company, and the Company
desires to issue and sell to the Investor, units (the "Units") consisting of
shares of the Company's Series E Convertible Preferred Stock, par value $.001
per share (the "Series E Preferred Stock"), all upon the terms set forth in
the Company's Confidential Private Placement Term Summary dated September 6,
1996, attached hereto, as amended or supplemented from time to time,
including all attachments, schedules and exhibits thereto (the "Term
Summary"). Each share of Series E Preferred Stock is currently convertible
into one share of the Company's Common Stock, $.001 par value (the "Common
Stock").
B. To induce the Investor to purchase the Units, the Company has
undertaken to grant the Investor limited rights to cause the Company to
register under the Securities Act of 1933, as amended, and the rules and
regulations thereunder (collectively, the "Securities Act"), the Common Stock
issued upon conversion of the Series E Preferred Stock to be purchased by the
Investor. This Agreement sets forth the terms and conditions of such
undertaking.
AGREEMENTS
In consideration of the foregoing and the mutual promises contained
herein, the Company and the Investor covenant and agree as follows:
1. Definitions. For purposes of this Agreement:
1.1 The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement or
statements or similar documents in compliance with the Securities Act and
the declaration or ordering of effectiveness of such registration statement
or document by the Securities and Exchange Commission (the "SEC"); and
1.2 The term "Registrable Securities" means collectively (i) the Common
Stock of the Company issued upon the conversion of the Series E Preferred
Stock, Series A Convertible Preferred Stock, par value $.001 per share
("Series A Preferred Stock"), Series B Convertible Preferred Stock, par
value $.001 per share ("Series B Preferred Stock"), Series C Convertible
Preferred Stock, par value $.001 per share ("Series C Preferred Stock"),
Series C1 Convertible Preferred Stock, par value $.001 per share ("Series C1
Preferred Stock"), Series D Convertible Preferred Stock, par value $.001 per
share ("Series D Preferred Stock") and (ii) any Common Stock of the
Company issued as
a dividend or other distribution with respect to, or in exchange for or in
replacement of such Common Stock, excluding in all cases, however, any
Registrable Securities sold by an Investor in a transaction in which its
registration rights under this Agreement are not assigned.
2. Registration.
2.1 In the event that the Company completes an underwritten initial
public offering of its Common Stock pursuant to a registration statement
declared effective under the Securities Act (an "IPO") prior to December 22,
1997, the Company shall, upon the written request of the Investor delivered
within 30 days of such completion, use its best efforts to cause all
Registrable Securities held by the Investor to be registered under the
Securities Act not later than 180 days after the closing date of such
initial public offering; provided, however, that the Investor may inform
the Company in writing that it wishes to exclude all or a portion of its
Registrable Securities from such registration, and have no further rights
to have such Registrable Securities registered by the Company.
2.2 The holders of a majority of the Registrable Securities shall have the
right to propose the managing underwriter(s), if any, for such registration
of the Registrable Securities, subject to the approval of the Company.
2.3 The Company is obligated to effect only one registration pursuant to
this Agreement.
2.4 In connection with an IPO of the Company's Common Stock, the Investor
agrees that, without the prior written consent of the Company, the Investor
shall not offer, sell, contract to sell, or otherwise dispose of any
Registrable Securities for and during the period beginning on the date that
the Company executes an underwriting agreement with respect to such offering
and continuing to and including 180 days after the date of the prospectus
included in the registration statement under the Securities Act for such
offering.
3. Obligations of the Company.
When required under Section 2.1 of this Agreement to effect the
registration of the Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
3.1 prepare and file with the SEC a registration statement (the
"Registration Statement") with respect to all Registrable Securities, other
than any Registrable Securities excluded by the Investor pursuant to Section
2.1, and use its best efforts to cause the Registration Statement to become
effective not later than 180 days after the closing date of the Company's
initial public offering of its securities, and keep the Registration
Statement effective at all times until December 22, 1997, which Registration
Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact
or omit to state a
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material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they were made,
not misleading;
3.2 prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and
the prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times until
December 22, 1997, and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by the
Registration Statement;
3.3 furnish promptly to the Investor such numbers of copies of a
prospectus, including a preliminary prospectus, and all amendments and
supplements thereto, in conformity with the requirements of the Securities
Act, and such other documents as the Investor may reasonably request in
writing in order to facilitate the public sale or other disposition of
Registrable Securities;
3.4 use its best efforts to register and qualify the securities covered by
the Registration Statement under the securities or blue sky laws of such
jurisdictions as shall be reasonably requested by the Investor, and to
prepare and file in those jurisdictions such amendments (including post-
effective amendments) and supplements and to take such other actions as may
be necessary to maintain such registration and qualification in effect at
all times until December 22, 1997, and to take all other actions necessary
or advisable to enable the disposition of such securities in such
jurisdictions; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business in
any jurisdiction where it is not now so qualified, to take any action which
would subject it to taxation as to the service of process in suits other
than those arising out of the offer or sale of the securities covered by
such registration statement in any jurisdiction where it is not now so
subject, to conform the composition of its assets at the time to the
securities or blue sky laws of such jurisdiction or to provide any
undertaking or make any change in its charter or bylaws which its Board
of Directors determines to be contrary to the best interests of the Company
and its stockholders;
3.5 in the event the holders of a majority in interest of the
Registrable Securities select the managing underwriters in accordance with
Section 2.2 of this Agreement, enter into and perform its obligations under
an underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
managing underwriter of such offering. The Investor hereby agrees to enter
into and perform its customary obligations under any such agreement
including, without limitation, customary indemnification and contribution
obligations;
3.6 notify the Investor, at any time when a prospectus relating to
Registrable Securities covered by the Registration Statement is required to
be delivered under the Securities Act, of the happening of any event as a
result of which the prospectus included in the 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
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statements therein, in light of the circumstances in which they were made,
not misleading. The Company shall promptly amend or supplement the
Registration Statement to correct any such untrue statement or omission;
3.7 notify the Investor of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the initiation
of any proceedings for that purpose. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible time;
3.8 make generally available to its security holders as soon as
practicable, but not later than 90 days after the close of the period
covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the Securities Act) covering a twelve month
period beginning not later than the first day of the Company's fiscal
quarter next following the effective date of the Registration Statement;
3.9 at the request of the holders of a majority in interest of the
Registrable Securities, furnish on the date that Registrable Securities are
delivered to the underwriters for sale in connection with a registration
pursuant to this Agreement (1) an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters and (2) a letter, dated such date,
from the independent certified public accountants of the Company, in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed
to the underwriters;
3.10 make available for inspection by the Investor, any underwriters
participating in the offering pursuant to the registration and the
counsel, accountants or other agents retained by the Investor or any such
underwriter, all pertinent financial and other records, corporate
documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information reasonably
requested by the Investor or any such underwriters in connection with the
registration;
3.11 if the Common Stock is then listed on a national securities
exchange, use its best efforts to cause the Registrable Securities to be
listed on such exchange. If the Common Stock is not then listed on a
national securities exchange, use its best efforts to facilitate the
inclusion of the Common Stock on the Nasdaq Stock Market.
3.12 provide a transfer agent and registrar, which may be a single entity,
for the Registrable Securities not later than the effective date of the
Registration Statement;
3.13 take all actions reasonably necessary to facilitate the timely
preparation and delivery of certificates (not bearing any legend restricting
the sale or transfer of such securities) representing the Registrable
Securities to be sold pursuant to the Registration Statement and to enable
such certificates to be in such denominations and registered in such names
as the Investor or any underwriters may reasonably request;
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3.14 take all other reasonable actions necessary to expedite and
facilitate the registration of the Registrable Securities pursuant to the
Registration Statement.
4. Furnish Information.
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Agreement with respect to the Investor
that (a) the Company shall have received an undertaking satisfactory to
it from the Investor to notify the Company of the happening of any event
within the knowledge of the Investor which causes the prospectus referred
to in Section 3.3 hereof, as it may be amended or supplemented, to
include an untrue statement of a material fact or to omit to state any
material fact required to be stated therein or necessary to make the
statement therein, in the light of the circumstances under which they
were made, not misleading and (b) such Investor shall furnish to the
Company such information regarding itself, the Registrable Securities
held by it, and the intended method of disposition of such Registrable
Securities as shall be reasonably required to effect the registration of
the Registrable Securities and shall execute such documents in connection
with such registrtion as the Company may reasonably request.
5. Expenses of Registration.
All expenses other than underwriting discounts and commissions incurred
in connection with registration, filings or qualifications pursuant to
Sections 2 and 3, including, without limitation, all registration,
listing, filing and qualification fees, printers and accounting fees, and
the fees and disbursements of counsel for the Company shall be borne by
the Company.
6. Indemnification.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
6.1 To the extent permitted by law, the Company will indemnify and hold
harmless the Investor, each person, if any, who controls such Investor, any
underwriter (as defined in the Securities Act) for the Investor and each
person, if any, who controls any such underwriter within the meaning of the
Securities Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), against any losses, claims, damages, expenses or liabilities
(joint or several) to which any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, expenses or liabilities (or actions or proceedings,
whether commenced or threatened, 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 the Registration Statement,
including any preliminary prospectus or final prospectus contained therein
or any amendments or supplements thereof, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein,
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in light of the circumstances in which they were made, not misleading
or (iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule
or regulation promulgated under the Securities Act, the Exchange Act
or any state securities law, and the Company will reimburse the
Investor and each such underwriter or controlling persons, promptly as
such expenses are incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, action or proceeding; provided,
however, that (a) the indemnity agreement contained in this Section
6.1 shall not apply to amounts paid in settlement of any such loss,
claim, damage, expense, liability or action if such settlement is
effected without the consent of the Company, which consent shall not
be unreasonably withheld or delayed, (b) the Company will not be
liable in any such case for any such loss, claim, damage, expense,
liability or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with
information furnished for use in connection with such registration by
the Investor, directors and officers of the Investor or any such
underwriter or controlling person, as the case may be, or (c) the
Company will not be liable to any person who participates as an
underwriter in the offering or sale of Registrable Securities or any
other person, if any, who controls or is controlled by such
underwriter within the meaning of the Securities Act, in any such case to
the extent that any such loss, claim, damage, expense or liability (or
action in respect thereto) arises out of such underwriter's failure to
send or give a copy of the final prospectus to the person asserting an
untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of
securities to such person if such statement or omission was corrected
in such final prospectus. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the
Investor or any such underwriter or controlling person or the Company
and shall survive the transfer of the Registrable Securities by the
Investor.
6.2 To the extent permitted by law, the Investor will indemnify and hold
harmless the Company, each of its directors, each of its officers and
employees who sign the Registration Statement, each person, if any, who
controls the Company within the meaning of the Securities Act or the
Exchange Act, any underwriter and any other stockholder selling securities
pursuant to the Registration Statement or any of its directors or officers
or any person who controls such holder or underwriter, against any losses,
claims, damages or liabilities (jointly or severally) or actions to which
any of them may become subject, under the Securities Act, the Exchange Act
or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) 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 information
furnished to the Company by such Investor for use in connection with such
registration, and such Investor will reimburse the Company, its directors,
officers and employees, each underwriter and controlling person for any
legal or other expense reasonably incurred by any of them in connection with
investigating or defending any such loss, claim, damage, expense, liability
or action; provided, however, that the indemnity agreement contained in this
Section 6.2 shall not apply to amounts paid in settlement of any such loss,
claim,
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damage, expense, liability or action if such settlement is effected without
the consent of the Investor, which consent shall not be unreasonably
withheld, conditioned or delayed.
6.3 Promptly after receipt by an indemnified party under this Section 6 of
notice of the commencement of any action (including any governmental action)
or proceeding, such indemnified party will, if a claim in respect thereof is
to be made against any indemnifying party under this Section 6, 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 that the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense
thereof with counsel selected by it and, after notice from the indemnifying
party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under Section 6.1 for
any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the reasonable fees and expenses to be paid by the
indemnifying party, if, in the reasonable opinion of counsel for the
indemnifying party, 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, in which event the
indemnifying party shall not be liable for the fees and expenses of more
than one counsel for all indemnified parties. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall relieve such indemnifying party
of any'liability to the indemnified party under this Section 6 only to the
extent prejudicial to the indemnifying party's ability to defend such
action, but the omission so to deliver written notice to the indemnifying
party will not relieve the indemnifying party of any liability that it
may have to any indemnified party otherwise than under this Section 6.
In addition, the indemnifying party shall not be required to indemnify,
reimburse or otherwise make any contribution to the amount paid or payable
by the indemnified party for any losses, claims, damages, expenses or
liabilities incurred by the indemnified party in settlement of any actions
or proceedings otherwise covered hereunder unless such settlement has been
previously approved by the indemnifying party. The indemnification required
by this Section 6 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, promptly as such expense,
loss, damage, expense or liability is incurred, and upon receipt by the
indemnifying party of such documentation as it may reasonably request.
6.4 To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would
otherwise be liable under this Section 6 to the extent permitted by law,
provided that (i) no contribution shall be made under circumstances where
the maker would not have been liable for indemnification under the fault
standards set forth in this Section 6, (ii) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any seller of Registrable Securities who was not
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guilty of such fraudulent misrepresentation and (iii) contribution by any
seller of Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such
Registrable Securities.
7. Reports Under Securities Exchange Act of 1934.
With a view to making available to the Investor the benefits of Rule
144 promulgated under the Securities Act and any other rule or regulation
of the SEC that may at any time permit the Investor to sell securities of
the Company to the public without registration, the Company agrees to:
7.1 timely file and keep available such information, documents and
reports as may be required or prescribed by the SEC under Section 13 or
15(d) (whichever is applicable) of the Exchange Act as well as any other
information, reports and documents required of the Company under the
Securities Act or the Exchange Act; and
7.2 furnish to the Investor, so long as the Investor owns any
Registrable Securities, forthwith upon request, (i) a written statement
by the Company as to its compliance with the reporting requirements of
Rule 144 (at any time after 90 days after the effective date of the first
registration statement filed by the Company), 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 such other reports and documents so filed by the
Company, and (iii) such information as the Investor may reasonably
request in availing itself of any rule or regulation of the SEC allowing
the Investor to sell the Registrable Securities without registration.
8. Assignment of Registration Rights. The rights to have the Company
register Registrable Securities pursuant to this Agreement may be
assigned by the Investor to transferees or assignees of such securities
provided the Company is, within reasonable time after such transfers,
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; provided, however, that 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 Securities Act. The term "Investor" as used in this
Agreement shall include permitted assignees.
9. Miscellaneous.
9.1 Notices required or permitted to be given hereunder shall be in
writing and shall be deemed to be sufficiently given when personally
delivered or sent by registered mail, return receipt requested, addressed
(i) if to the Company, at Osiris Therapeutics, Inc., 0000 Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000-0000, Attention: President, and (ii)
if to the Investor, at the address set forth under his name in the
Subscription Agreement, or at such other address as each such party
furnishes by notice given in accordance with this Section 9.1.
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9.2 Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or
remedy, will not operate as a waiver thereof. No waiver will be effective
unless and until it is in writing and signed by the party giving the waiver.
9.3 This Agreement shall be enforced, governed and construed in all
respects in accordance with the laws of the State of Delaware, as such
laws are applied by Delaware courts to agreements entered into and to be
performed in Delaware by and between residents of Delaware. In the event
that any provision of this Agreement is invalid or unenforceable under
any applicable statute or rule of law, then such provision shall be
deemed inoperative to the extent that it may conflict therewith and shall
be deemed modified to conform with such statute or rule of law. Any
provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision
hereof.
9.4 This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and may be amended,
supplemented, modified or terminated with respect to all holders of
Registrable Securities by a writing executed by the Company and the holders
of a majority of the outstanding shares of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock
and the Series E Preferred Stock acting together as a single class.
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of this ____ day of _______________, 1996.
INVESTOR
By: _______________________
Name:______________________
OSIRIS THERAPEUTICS, INC.
By: _______________________
Name: _____________________
Title: ______________________
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