Exhibit 10.2
THIS
CONVERTIBLE PROMISSORY NOTE (THIS “NOTE”) AND THE
SECURITIES THAT MAY BE ACQUIRED PURSUANT TO THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE OFFERED, SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
ANY U.S. PERSON, OTHER THAN DISTRIBUTORS (AS DEFINED IN REGULATION
S PROMULGATED UNDER THE SECURITIES ACT), IN THE ABSENCE OF SUCH
REGISTRATION, UNLESS SUCH TRANSACTION IS EXEMPT FROM OR NOT SUBJECT
TO REGISTRATION UNDER THE SECURITIES ACT, AND HOLDER HAS, IF
REQUIRED BY THE COMPANY, DELIVERED AN OPINION OF COUNSEL TO THAT
EFFECT. BY ACCEPTING THIS NOTE, HOLDER REPRESENTS, AMONG
OTHER THINGS, THAT IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE
501(a) OF THE SECURITIES ACT) AND IS NOT A U.S PERSON, AND IS
ACQUIRING THIS NOTE AND WILL ACQUIRE ANY CONVERSION SHARES (AS
DEFINED HEREIN) OUTSIDE THE U.S. AND IN ACCORDANCE WITH REGULATION
S, AND WILL NOT ENGAGE IN ANY HEDGING TRANSACTIONS WITH RESPECT TO
THIS NOTE OR THE COMMON STOCK OF THE COMPANY PRIOR TO THE
EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD (AS DEFINED
HEREIN) EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT.
ISSUANCE OF THE CONVERSION SHARES IS CONDITIONED UPON THE CONTINUED
AVAILABILITY OF REGULATION S IN RESPECT OF HOLDER AT TIME OF
CONVERSION, OR THE AVAILABILITY TO HOLDER OF ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE ACT IN RESPECT OF SUCH
ISSUANCE.
CONVERTIBLE PROMISSORY
NOTE
FOR VALUE
RECEIVED, Osiris Therapeutics, Inc. , a Delaware
corporation (the “ Company “), having an address
of 7015 Albert Einstein Drive, Columbia, MD, U.S.A., hereby
promises to pay to the order of
(the “ Holder “), at the offices of Holder at
or such other place as may be designated by Holder to the Company
in writing, the aggregate principal amount of
U.S. Dollars
($ )
(the “ Principal “) together with accrued and
unpaid interest, upon the terms and conditions hereinafter set
forth.
1.
Payment
Terms .
The Company promises to pay to Holder the Final Payment Amount (as
hereinafter defined) on November 30 , 2009 (the “
Maturity Date “), unless this Note is earlier redeemed
by the Company or converted into Common Stock (as hereinafter
defined) of the Company, pursuant to Section 3 hereof,
as applicable. All accrued and unpaid interest shall be due
and payable in accordance with Section 2 hereof.
All payments hereunder shall be made in lawful money of the United
States of America. Payment shall be credited first to the accrued
and unpaid interest then due and payable and the remainder to
Principal. “Final Payment Amount” means an amount
equal to the sum of the total unpaid Principal plus any accrued and
unpaid interest.
2.
Interest
. Interest on the
outstanding portion of Principal of this Note shall accrue at a
rate of two percent (2%) per annum . All computations
of interest shall be made on the basis of a 360-day year for actual
days elapsed. All accrued interest shall be due and payable
in cash on the Maturity Date, the Redemption Date (as
hereinafter defined) or Conversion Date (as hereinafter defined),
as the case may be, in each case in accordance with the terms and
conditions of this Note. Any accrued but unpaid interest will be
paid in cash at the time of conversion. If the Maturity Date, the
Redemption Date or the Conversion
March , 2008
Convertible Promissory Note
1
Date, be on a day that is not a business day,
payment of any amounts due and payable on such date shall be
effected on the immediately following business day.
3.
Conversion or
Redemption of this Note .
(a)
Conversion
. This Note is
convertible into shares of Common Stock at any time at the sole
discretion of the Holder. Upon receipt of a written request for
conversion of this Note upon the Company, the “Conversion
Date ,” this Note shall be converted in its entirety
and not in part into shares of the Common Stock. The number
of shares of Common Stock to which Holder shall be entitled upon
such conversion shall be equal to the sum of the total unpaid
principal divided by the Closing Price of the Common Stock, as
reported on the NASDAQ Global Market on
March , 2008 (the
“Note Conversion Rate ”). Any accrued but unpaid
interest will be paid in cash at the time of conversion. For
purposes of this paragraph 3(a), the term Closing Price shall mean,
as reasonably determined by the Company, the reported closing price
on the NASDAQ Global Market on
March , 2008.
(b)
Redemption
. This Note may be
redeemed by the Company at any time by payment to Holder in
immediately available funds of the sum of the total unpaid
principal plus any accrued but unpaid interest. The Company
must provide written notice to Holder not less than 30 days prior
to the effective date of such redemption (the “Redemption
Date ”).
©
No Fractional
Shares .
The number of Common Shares resulting from a conversion of this
Note pursuant to Section 3(a) above shall be
rounded up to the next higher integral share of Common Stock, and
no fractional shares shall be issuable by the Company upon
conversion of this Note. Conversion of this Note shall be
deemed payment in full of this Note and this Note shall thereupon
be cancelled.
4.
The indebtedness evidenced
hereby ranks pari passu in right of payment to the indebtedness
evidenced from time to time by the other of the Offered Notes (as
defined below) and to any other convertible debt securities of the
Company now or hereafter existing and so providing, and the
indebtedness evidenced hereby ranks senior in right of payment to
all classes and series of the Company’s capital stock.
By accepting this Note the Holder does expressly consent to the
aforesaid ranking in right of payment and agrees to perform, from
time to time, such acts, and to execute, acknowledge and/or deliver
such other instruments, documents and agreements, as may from time
to time be requested by the Company, or as may from time to time
otherwise be reasonably requested, necessary or required, to so
confirm or provide.
5.
Representations and
Warranties of the Company . The Company represents and warrants to
Holder as follows:
(a)
The execution and delivery
by the Company of this Note (i) are within the Company’s
corporate power and authority, and (ii) have been duly
authorized by all necessary corporate action.
(b)
This Note is a legally
binding obligation of the Company, enforceable against the Company
in accordance with the terms hereof, except to the extent that
(i) such enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors’ rights, and
(ii) the availability of the remedy of specific performance or
in injunctive or other equitable relief is subject to the
discretion of the court before which any proceeding therefore may
be brought.
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6.
Use of
Proceeds . The proceeds received by the Company
from the sale of this Note shall be used by the Company for working
capital, redemption or repayment of debt or other general corporate
purposes.
7.
No Waiver in Certain
Circumstances . No course of dealing of Holder nor any
failure or delay by Holder to exercise any right, power or
privilege under this Note shall operate as a waiver hereunder and
any single or partial exercise of any such right, power or
privilege shall not preclude any later exercise thereof or any
exercise of any other right, power or privilege
hereunder.
8.
Certain Waivers by the
Company .
Except as expressly provided otherwise in this Note, the Company
and every endorser or guarantor, if any, of this Note waive
presentment, demand, notice, protest and all other demands and
notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note, and assent to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral available to
Holder, if any, and to the addition or release of any other party
or person primarily or secondarily liable.
9.
No Unlawful
Interest . Notwithstanding anything herein to the
contrary, payment of any interest or other amount hereunder shall
not be required if such payment would be unlawful. In any
such event, this Note shall automatically be deemed amended so that
interest charges and all other payments required hereunder,
individually and in the aggregate, shall be equal to but not
greater than the maximum permitted by law. As a condition to
its obligation to make any payment of interest hereunder without
withholding as may otherwise be required under applicable U.S. tax
laws, the Company may require that the Holder submit to the Company
a properly completed IRS Form W-8 or similar or successor form
sufficiently demonstrating to the reasonable satisfaction of the
Company that no such withholding is required.
10.
R epresentations,
Warranties and Covenants of Holder . By accepting this
Note, Holder represents and warrants to the Company, and agrees, as
follows:
(a)
The principal address of
Holder is outside of the United States, and Holder is not a U.S.
Person as such term is defined and used in
Regulation S.
(b)
At the time the
“buy” order was originated in respect of Holder’s
acquisition of this Note, Holder was outside of the U.S., and
Holder is outside the U.S. as of the date of the execution and
delivery of this Note by Holder. No offer to acquire this
Note was made to Holder or its representatives inside the United
States.
(c)
Holder is an
“accredited investor” within the meaning of
Rule 501(a) under the Securities Act.
(d)
Holder is acquiring this
Note and will acquire any Conversion Shares for his/her/its own
account, not on behalf or for the account of any U.S. Person, and
neither the purchase of this Note nor the acquisition of the
Conversion Shares has been pre-arranged with a purchaser in the
U.S.
(e)
The Holder will make all
resales of this Note and any Conversion Shares only outside of the
United States in compliance with Regulation S, or pursuant to a
registration statement under the Securities Act, or pursuant to an
available exemption from registration under the Securities
Act. Specifically, Holder will not resell this Note or any
Conversion Shares to any U.S. Person or within the United States
prior to the expiration of one year (the “Distribution
Compliance Period “) after the closing of the offering
to which this Note relates, except pursuant to registration under
the Securities Act or an exemption from registration under the
Securities Act.
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(f)
Holder will not engage in
any hedging transactions with respect to this Note or the Common
Stock of the Company at any time prior to the expiration of the
Distribution Compliance Period, except in compliance with the
Securities Act.
(g)
The Company is and will be
relying on the truth and accuracy of Holder’s
representations, warranties, agreements, acknowledgements and
understandings as set forth herein, in order to determine the
applicability of such exemptions and the suitability of Holder and
his/her/its acquisition of the Note and Conversion Shares upon
conversion hereof.
(h)
Holder has been furnished
with, or has acquired, copies of all of the documents filed by the
Company with the United States Securities and Exchange Commission
during the twelve months prior to the date hereof, as well as all
othe
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