Exhibit 10.5
THIS PROMISSORY NOTE (THIS
“NOTE”) HAS 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.
PROMISSORY NOTE
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US $1,500,000.00
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June 12, 2008
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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 One Million Five
Hundred Thousand U.S. Dollars ($1,500,000.00)
(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
December 12, 2008 (the “ Maturity Date
”), unless this Note is earlier redeemed by 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 twenty percent
(20%) 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 or the Redemption 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 or the
Redemption 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.
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3.
Redemption of this
Note . This Note may be
redeemed by the Company upon any monthly anniversary date of
issuance 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 10 days prior to the effective date of such
redemption (the “ Redemption Date ”).
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 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.
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.
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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 for his/her/its own account, not on
behalf or for the account of any U.S. Person, and the purchase of
this Note has not been pre-arranged with a purchaser in the
U.S.
(e)
The Holder will make all resales of this Note 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 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
