Document:

exv10w6

 

Exhibit 10.6

OPTION AGREEMENT

     This Option Agreement (“Option Agreement”) is made as of the 5th day of April, 2007 (the
“Effective Date”), by and between ReGen Biologics, Inc., a Delaware corporation (hereinafter
referred to as the “Company”), and the undersigned investor (together with its successors and
permitted assigns, the “Holder”).

RECITALS

     WHEREAS, in order to induce the Holder to enter into that certain Subscription Agreement
between the Company and the Holder dated as of April 5, 2007 (the “Subscription Agreement”), the
parties have entered into this Option Agreement granting to the Holder an option to purchase,
pursuant to the terms and conditions set forth herein, the Option Shares (as hereinafter defined);

     NOW, THEREFORE, BE IT RESOLVED, in consideration of the mutual covenants expressed herein and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the parties agree as follows:

AGREEMENT

	 	1.	 	GRANT AND VESTING OF OPTION.

	 	(a)	 	Grant. Subject to the terms hereof, the Company hereby
grants to the Holder the option (the “Option”) to purchase from the Company
such number of shares (the “Option Shares”) of : (i) the Company’s Series D
Convertible Preferred Stock, $0.01 par value per share (the “Preferred Stock”),
equal to the number of shares purchased by the Holder pursuant to the
Subscription Agreement; or (ii) if the Preferred Stock has been
converted to shares of the Company’s Common Stock, $0.01 par value per share (the “Common
Stock”) pursuant to paragraph 7(a) of the Company’s Certificate of
Designations, Preferences and Rights of Series D Convertible Preferred Stock
(the “Mandatory Conversion”), such number of shares of Common Stock equal to
the number of shares of Common Stock such Holder would have been entitled to
receive upon conversion of the Preferred Stock such Holder purchased pursuant
to the Subscription Agreement.

	 	(b)	 	Vesting. The Holder may exercise this Option upon, and
not later than fifteen (15) calendar days following, the Company’s public
announcement of receipt of Food and Drug Administration clearance of the
Company’s collagen scaffold device as a class II device (the last date of such
15-day period, the “Expiration Date”). In no event shall this Option be
exercised later than the Termination Date provided for below.

 

 

	 	(c)	 	Exercise Price. The “Exercise Price” (which shall be
subject to adjustment whenever there shall occur a stock split, combination,
reclassification or other similar event involving the Preferred Stock or the
Common Stock, as applicable) shall be (i) $42.00 per share of Preferred Stock
or (ii) if applicable pursuant to Paragraph 1(a)(ii) of this Option Agreement,
$0.42 per share of Common Stock.

	 	(d)	 	Term. The Option shall terminate upon the earlier of
(i) the Expiration Date, (ii) December 31, 2007 (the “Termination Date”) and
(iii) partial exercise as provided by Section 2 below.

	 	2.	 	EXERCISE OF OPTION. In order to exercise the Option, the Holder must
present at the Company’s principal executive offices the following:

	 	(a)	 	the original Option Agreement together with a fully executed
Option Exercise Form in the form attached hereto and made a part hereof as
Exhibit A, including the representation to the Company that all of the
representations and warranties made by the Holder in Section 6(b) of this
Option Agreement are true and correct on the date of exercise; and
	 
	 	(b)	 	a certified or bank cashier’s check payable to the Company or a
wire transfer of immediately available funds in the amount of the product of
the Option Shares to be exercised and the Exercise Price (such amount, the
“Exercise Amount”).

	 	 	 	The Company shall promptly thereafter deliver, or cause to be delivered, to the
Holder certificates for the number of Option Shares being purchased. If the Holder
elects to exercise the Option for less than all of the Options Shares subject
hereto, the option to purchase the remainder of the Option Shares shall immediately
terminate.
	 
	 	3.	 	TRANSFER. This Option may not be transferred or assigned in any
manner, without the consent of the Company in its sole and absolute discretion.
	 
	 	4.	 	RIGHTS AND OBLIGATIONS OF THE HOLDER. The Holder shall not, by virtue
hereof, be entitled to any rights as a stockholder in the Company, either at law or in
equity; provided, however, in the event that any certificate representing Option Shares
is issued to the Holder upon exercise of some or all of the Option, the Holder shall,
for all purposes, be deemed to have become the holder of record of such Option Shares
on the date on which full payment of the Exercise Amount was made, irrespective of the
date of delivery of the certificate representing such Option Shares. The rights of the
Holder are limited to those expressed herein.
	 
	 	5.	 	REGISTRATION RIGHTS. The Holder shall have the following registration
rights with respect to the Option Shares:

	 	(a)	 	Required Registration. Following the Mandatory
Conversion, the Company agrees to register the resale of the Option Shares by
filing a

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	 	 	 	Registration Statement on Form S-1 or on any other form for which the
Company then qualifies and is available (the “Registration Statement”) with
the SEC within the earlier of (i) thirty (30) calendar days after the filing
of the Company’s Form 10-K for the prior fiscal year or (ii) ninety (90)
calendar days after the Expiration Date, or registering such Option Shares
on any Registration Statement filed by the Company. The Company shall
subsequently use commercially reasonable efforts to cause the SEC to declare
the Registration Statement effective as soon as possible. The Company shall
thereafter maintain the effectiveness of the Registration Statement until
the earlier of (a) the date on which all the Option Shares have been sold
pursuant to the Registration Statement or Rule 144 promulgated under the
Securities Act (“Rule 144”), (b) such time as the Company reasonably
determines, based on an opinion of counsel, that all of the holders of
options granted contemporaneously with the Option will be eligible to sell
under Rule 144 all of the Option Shares then owned by such holders within
the volume limitations imposed by paragraph (e) of Rule 144 in the three (3)
month period immediately following the termination of the effectiveness of
the Registration Statement, and (c) the first anniversary of the date the
Registration Statement was declared effective by the SEC. The Registration
Statement filed pursuant to this Section 5(a) may include other securities
of the Company that are held by individuals, partnerships, corporations,
business trusts, joint stock companies, estates, trusts, unincorporated
associations, joint ventures or other entities who, by virtue of agreements
with the Company, are entitled to similar registration rights.
	 
	 	(b)	 	Registration Procedures.

	 	i.	 	In case of the Registration Statement effected
by the Company subject to this Section 5, the Company shall keep the
Holder advised in writing as to the initiation of such registration,
and as to the completion thereof. In addition, subject to Section 5(a)
above, the Company shall, to the extent applicable to the Registration
Statement:

	 	a)	 	prepare and file with the SEC
such amendments and supplements to the Registration Statement as
may be necessary to keep such registration continuously
effective and free from any material misstatement or omission
necessary to make the statements therein, in light of the
circumstances, not misleading, and comply with provisions of the
Securities Act with respect to the disposition of all securities
covered thereby during the period referred to in Section 5(a);
	 
	 	b)	 	update, correct, amend and
supplement the Registration Statement as necessary;

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	 	c)	 	notify the Holder promptly when
the Registration Statement is declared effective by the SEC, and
furnish such number of prospectuses, including preliminary
prospectuses, and other documents incident thereto as Holder may
reasonably request from time to time;
	 
	 	d)	 	use its commercially reasonable
efforts to register or qualify such Option Shares under such
other securities or blue sky laws of such jurisdictions of the
United States where an exemption is not available and as Holder
may reasonably request to enable it to consummate the
disposition in such jurisdiction of the Option Shares (provided
that the Company will not be required to (A) qualify generally
to do business in any jurisdiction where it would not otherwise
be required to qualify but for this provision, or (B) consent to
general service of process in any such jurisdiction, or (C)
subject itself to taxation in any jurisdiction where it is not
already subject to taxation);
	 
	 	e)	 	notify Holder at any time when a
prospectus relating to the Option Shares 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 contains an untrue statement of a
material fact or omits any fact necessary to make the statements
therein not misleading and, subject to Section 5(a), the Company
will prepare a supplement or amendment to such prospectus, so
that, as thereafter delivered to purchasers of such shares, such
prospectus will not contain any untrue statements of a material
fact or omit to state any fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading;
	 
	 	f)	 	cause all such Option Shares to
be listed on each securities exchange on which similar
securities issued by the Company are then listed and obtain all
necessary approvals for trading thereon;
	 
	 	g)	 	provide a transfer agent and
	 
	 	 	 	registrar for all such Option Shares not later than the
effective date of the Registration Statement;
	 
	 	h)	 	upon the sale of any Option
Shares pursuant to the Registration Statement, direct the
transfer agent to remove all restrictive legends from all
certificates or other instruments evidencing the Option Shares;
	 
	 	i)	 	With a view to making available
to the Holder the benefits of certain rules and regulations of
the SEC that at any time

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	 	 	 	permit the sale of the Option Shares to the public without
registration, so long as any Option Shares are outstanding,
the Company shall use its commercially reasonable efforts for
a period of two years following the Effective Date:

	 	(1)	 	to make and keep
public information available, as those terms are
understood and defined in Rule 144(c) under the
Securities Act;
	 
	 	(2)	 	to file with the
SEC in a timely manner all reports and other documents
required of the Company under the Exchange Act; and
	 
	 	(3)	 	to furnish to the
Holder upon any reasonable request a written statement
by the Company as to its compliance with the public
information requirements of Rule 144(c) under the
Securities Act; and

	 	j)	 	To advise the Holder promptly
after it has received notice or obtained knowledge of the
existence of any stop order by the SEC delaying or suspending
the effectiveness of the Registration Statement or of the
initiation or threat of any proceeding for that purpose, and to
make every commercially reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of the
Registration Statement at the earliest possible time.

	 	ii.	 	Notwithstanding anything stated or implied to
the contrary in Section 5(b)(i) above, the Company shall not be
required to consent to any underwritten offering of the Option Shares
or to any specific underwriter participating in any underwritten public
offering of the Option Shares.
	 
	 	iii.	 	Each Holder agrees that upon receipt of any
notice from the Company of the happening of any event of the kind
described in Section 5(b)(i)(e), and subject to Section 5(d), such
Holder will forthwith discontinue such Holder’s disposition of Option
Shares pursuant to the registration statement relating to such Option
Shares until such Holder’s receipt of the copies of the supplemented or
amended prospectus contemplated by Section 5(b)(i)(e) and, if so
directed by the Company, will deliver to the Company at the Company’s
expense all copies, other than permanent file copies, then in such
Holder’s possession, of the prospectus relating to such Option Shares
current at the time of receipt of such notice.
	 
	 	iv.	 	Except as required by law, all expenses
incurred by the Company in complying with this Section 5, including but
not limited to, all registration, qualification and filing fees,
printing expenses, fees

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	 	 	 	and disbursements of counsel and accountants for the Company, blue
sky fees and expenses (including fees and disbursements of counsel
related to all blue sky matters) incurred in connection with any
registration, qualification or compliance pursuant to this Section 5
shall be borne by the Company. All underwriting discounts and
selling commissions applicable to a sale incurred in connection with
any registration of Option Shares and the legal fees and other
expenses of a Holder shall be borne by such Holder.

	 	(c)	 	Further Information. If Option Shares owned by a
Holder are included in any registration, such Holder shall furnish the Company
such information regarding itself as the Company may reasonably request and as
shall be required in connection with any registration (or amendment or
supplement thereto), referred to in this Agreement, and Holder shall indemnify
the Company with respect thereto in accordance with Section 9 hereof. The
Holder hereby represents and warrants to the Company that it has accurately and
completely provided the requested information and answered questions (a)
through (i) on the signature pages of the Subscription Agreement, and the
Holder agrees and acknowledges that the Company may rely on such information as
being true and correct for purposes of preparing and filing the Registration
Statement at the time of filing thereof and at the time it is declared
effective, unless the Holder has notified the Company in writing to the
contrary prior to such time.
	 
	 	(d)	 	Right of Suspension.

	 	i.	 	Notwithstanding any other provision of this
Agreement or any related agreement to the contrary, the Company shall
have the right, at any time, to suspend the effectiveness of the
Registration Statement and offers and sales of the Option Shares
pursuant thereto whenever, in the good faith judgment of the Company,
(i) continuing such effectiveness or permitting such offers and sales
could reasonably be expected to have an adverse effect upon the
Company’s ability to raise additional funds pursuant to one or more
private placements of shares of the Company or any debt securities of
the Company, a proposed sale of all or substantially all of the assets
of the Company or a merger, acquisition, reorganization,
recapitalization or similar current transaction materially affecting
the capital, structure, or equity ownership of the Company, (ii) the
Registration Statement must be suspended in order to register
additional shares of Preferred Stock or Common Stock, (iii) there
exists a material development or a potential material development with
respect to or involving the Company that the Company would be obligated
to disclose in the prospectus used in connection with the Registration
Statement, which disclosure, in the good faith judgment of the Company,
after considering the advice of counsel, would be premature or
otherwise inadvisable at such time, or (iv) the Registration

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	 	 	 	Statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference contains 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, in light of the circumstances, not misleading, including
without limitation that period annually during which any Registration
Statement would require suspension pending the Issuer’s new fiscal
year financial statements (a “Suspension Event”). In the event that
the Company shall determine to so suspend the effectiveness of the
Registration Statement and offers and sales of the Option Shares
pursuant thereto, the Company shall, in addition to performing those
acts required to be performed under the Securities Act and/or the
Exchange Act or deemed advisable by the Company, deliver to each
Holder written notice thereof, signed by the Chief Financial Officer
or Chief Executive Officer of the Company. Upon receipt of such
notice, the Holders shall discontinue disposition of the Option
Shares pursuant to the Registration Statement and prospectus until
such Holders (x) are advised in writing by the Company that the use
of the Registration Statement and prospectus (and offers and sales
thereunder) may be resumed, (y) have received copies of a
supplemental or amended prospectus, if applicable, and (z) have
received copies of any additional or supplemental filings which are
incorporated or deemed to be incorporated by reference into such
prospectus. The Company will exercise commercially reasonable
efforts to ensure that the use of the Registration Statement and
prospectus may be resumed as quickly as practicable.
	 
	 	ii.	 	The Company’s right to suspend the
effectiveness of the Registration Statement and the offers and sales of
the Option Shares pursuant thereto, as described above in this Section
5(d), shall be for a period of time (the “Suspension Period”) beginning
on the date of the occurrence of the Suspension Event and expiring on
the earlier to occur of (i) the date on which the Suspension Event
ceases, or (ii) ninety (90) days after the occurrence of the Suspension
Event; provided, however, that there shall not be more than two
Suspension Periods in any 12-month period. Notwithstanding the
foregoing, the Company shall be able to suspend the effectiveness of
the Registration Statement and offers and sales of the Option Shares
for any time period as may reasonably be required in order to update
the Registration Statement to replace financial information which is no
longer current, as required by applicable securities law.
	 
	 	iii.	 	In addition, in connection with any
underwritten public offering of securities of the Company, if requested
by the Company or its managing underwriter, each Holder will enter into
a lock-up

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	 	 	 	agreement pursuant to which such Holder will not, during the seven
(7) days prior to, and for a period no longer than one hundred eighty
(180) days following, the date of the prospectus (or if the offering
is pursuant to a shelf registration statement, the date of the
pricing prospectus supplement) relating to the offering, offer, sell
or otherwise dispose of any securities of the Company without the
prior consent of the Company and the managing underwriter, provided
that the executive officers and directors of the Company enter into
lock-up agreements for a period at least as long and on the same
terms.

	 	6.	 	COVENANTS.

	 	(a)	 	The Company covenants and agrees that all Option Shares
delivered upon exercise (in accordance with the terms and conditions set forth
herein) of the Option will, upon delivery, be duly and validly authorized and
issued, fully paid and non-assessable, and free from all liens and charges with
respect to the purchase thereof.
	 
	 	(b)	 	The Company covenants and agrees that this Option Agreement has
been duly and validly authorized, executed and delivered. In addition, the
Company agrees at all times to reserve and keep available an authorized number
of (i) shares of the Preferred Stock sufficient to permit the exercise in full
of the Option or (ii) after the Mandatory Conversion, shares of its Common
Stock sufficient to permit the exercise in full of the Option.

	 	7.	 	REPRESENTATIONS AND WARRANTIES.

	 	(a)	 	The Option Shares will not be registered under the Securities
Act of 1933, as amended, or the rules and regulations promulgated thereunder
(such Act and rules and regulations being hereinafter referred to as the “Act”)
or any state securities laws. The Holder agrees that the sale or any other
disposition of the Option Shares will be made in compliance with federal and
applicable state securities laws.
	 
	 	(b)	 	The Holder hereby represents and warrants to the Company as
follows:

	 	i.	 	it is an “accredited investor” within the
meaning of Rule 501 under the Act;
	 
	 	ii.	 	it is sophisticated and experienced in matters
of equity investing in general and in financial and business matters
related to the business of the Company in particular, capable of
evaluating the merits and risks of an investment in the Option and the
Option Shares;

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	 	iii.	 	it is acquiring the Option and will acquire the
Option Shares for investment for its own account and not with a view to
any distribution thereof in violation of Federal or applicable state
securities laws;
	 
	 	iv.	 	this Option Agreement and the transactions
hereby have been duly approved by all requisite action of the Holder,
and the Holder has full power and authority to enter into and perform
its obligations under this Option Agreement, and to otherwise carry out
the transactions contemplated by this Option Agreement, without the
consent or approval of, notice to or registration with any person,
association, entity or governmental authority;
	 
	 	v.	 	this Option Agreement is a legal, valid and
binding obligation of the Holder enforceable in accordance with its
terms; and
	 
	 	vi.	 	the execution, delivery, performance and
consummation of this Option Agreement and the transactions provided for
herein do not and will not violate: (a) any contract, agreement or
other commitment to which the Holder is a party, or by which the Holder
is bound; or (b) any order, writ, injunction, decree, statute,
ordinance, rule or regulation applicable to the Holder.

	 	8.	 	FRACTIONAL SHARES. The Company shall not be required to issue any
fraction of a share of Preferred Stock or, after the Mandatory Conversion, any fraction
of a share of Common Stock, upon the exercise of the Option. If any fractional
interest in a share of Preferred Stock or Common Stock, as the case may be, shall be
deliverable upon the exercise of the Option (in whole or in part), the Company shall
make an adjustment therefor in cash equal to such fraction multiplied by the closing
price of the Preferred Stock or Common Stock, as the case may be, on the business day
directly preceding the day of exercise. If there is no closing price, then the
fraction shall be multiplied by the fair market value of a share of Preferred Stock or
Common Stock, as the case may be, as determined by the Board of Directors of the
Company.
	 
	 	9.	 	INDEMNIFICATION.

	 	(a)	 	Indemnification by the Company. The Company will
indemnify and hold harmless each Holder of Option Shares which are included in
a registration statement pursuant to the provisions of Section 5 hereof and any
underwriter (as defined in the Securities Act) for such Holder, and any person
who controls such Holder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act or such underwriter within the
meaning of the Securities Act, and any officer, director, investment adviser,
employee, agent, partner, member or affiliate of such Holder (each, a “Holder
Indemnified Party”), from and against, and will reimburse each such Holder
Indemnified Party with respect to,

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	 	 	 	any and all claims, actions, demands, losses, damages, liabilities, costs
and reasonably incurred expenses to which such Holder or any such Holder
Indemnified Party may become subject under the Securities Act or otherwise,
insofar as such claims, actions, demands, losses, damages, liabilities,
costs or reasonably incurred expenses arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact contained
in such registration statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of or are based upon 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 (ii) any materially inaccurate representation or breach of any material
warranty, agreement or covenant of the Company contained herein;
provided, however, that the Company will not be liable in any such
case to the extent that any such claim, action, demand, loss, damage,
liability, cost or expense is caused by an untrue statement or alleged
untrue statement or omission or alleged omission (1) made in conformity with
information furnished by such Holder in writing specifically for use in the
preparation thereof, or (2) which was cured in an amendment or supplement to
the prospectus (or any amendment or supplement thereto) delivered to the
Holder on a timely basis to permit proper delivery thereof prior to the date
on which any Option Shares were transferred or sold.
	 
	 	(b)	 	Indemnification by the Holder. Each Holder of Option
Shares which are included in a registration statement pursuant to the
provisions of Section 5 hereof will indemnify and hold harmless the Company,
and any Person who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, and any officer,
director, employee, agent, partner, member or affiliate of the Company (each,
an “Company Indemnified Party”) from and against, and will reimburse the
Company Indemnified Parties with respect to, any and all losses, damages,
liabilities, costs or reasonably incurred expenses to which such Company
Indemnified Parties may become subject under the Securities Act or otherwise,
insofar as such losses, damages, liabilities, costs or reasonably incurred
expenses are caused by any untrue or alleged untrue statement of any material
fact contained in such registration statement, any prospectus contained therein
or any amendment or supplement thereto, or are caused by the omission or the
alleged omission to state therein a 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, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was so made solely in reliance upon and in conformity with
written information furnished by such Holder specifically for use in the
preparation thereof; provided, however, that the liability of any
Holder pursuant to this Section 9(b) shall be limited to an amount not to
exceed the net proceeds received by such Holder from the sale of Option Shares

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	 	 	 	pursuant to the registration statement which gives rise to such obligation
to indemnify.
	 
	 	(c)	 	Procedures. Promptly after receipt by a party
indemnified pursuant to the provisions of Section 9(a) or Section 9(b) of
notice of the commencement of any action involving the subject matter of the
foregoing indemnity provisions, such indemnified party will, if a claim thereof
is to be made against the indemnifying party pursuant to the provisions of
Section 9(a) or Section 9(b), notify the indemnifying party of the commencement
thereof; but the omission to so notify the indemnifying party will not relieve
it from any liability which it may have to an indemnified party otherwise than
under this Section 9 and shall not relieve the indemnifying party from
liability under this Section 9, except to the extent that such indemnifying
party is materially prejudiced by such omission. In case such action is
brought against any indemnified party and such indemnified party notifies the
indemnifying party of the commencement thereof, the indemnifying party shall
have the right to participate in, and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party pursuant to the provisions of Section 9(a) or
Section 9(b) for any legal or other expense subsequently incurred by such
indemnified party in connection with the defense thereof. No indemnifying
party shall be liable to an indemnified party for any settlement of any action
or claim without the consent of the indemnifying party. No indemnifying party
will consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation.

	 	10.	 	SURVIVAL. The obligations of the Holder as set forth in Section 4
hereof shall survive the exercise of the Option in full and the termination of this
Option Agreement.
	 
	 	11.	 	NOTICES. Any notice required or permitted to be given hereunder shall
be in writing, and shall be either (i) personally delivered, (ii) sent by U.S.
certified or registered mail, return receipt requested, postage prepaid, or (iii) sent
by Federal Express or other reputable common carrier guaranteeing next business day
delivery, to the respective addresses of the parties set forth below, or to such other
place as any party hereto may by notice given as provided herein designate for receipt
of notices hereunder. Any such notice shall be deemed given and effective upon receipt
or refusal of receipt thereof by the primary party to whom it is to be sent.

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	 	 	 	To the Holder, at the address provided in the Subscription Agreement.

	 	 	 
	To the Company:

	 	ReGen Biologics, Inc.
	 

	 	509 Commerce Street
	 

	 	Franklin Lakes, NJ 07417
	 

	 	Attention: Brion D. Umidi
	 

	 	Telecopy: 201.651.5141
	 
	 	 
	with a copy to:
	 	 
	 
	 	 
	 

	 	Pillsbury Winthrop Shaw Pittman LLP
	 

	 	1650 Tysons Boulevard
	 

	 	McLean, VA 22102
	 

	 	Attention: David C. Main, Esq.
	 

	 	Telecopy: 703.770.7901

	 	12.	 	GOVERNING LAW. This Option Agreement shall be governed by the laws of
the State of New York without reference to its principles of conflicts of laws.
	 
	 	13.	 	LITIGATION. It is the intent of the parties upon execution hereof that
this Option Agreement be deemed to have been prepared by all of the parties to the end
that no party shall be entitled to the benefit of any favorable interpretation or
construction of any term or provision hereof under any rule or law.
	 
	 	14.	 	ENTIRE AGREEMENT. This Option Agreement, together with the
Subscription Agreement and the Certificate of Designations, Preferences and Rights
relating to the Preferred Stock, contains the entire understanding between the parties
concerning the subject matter of this Option Agreement. There are no representations,
agreements, arrangements or undertakings, oral or written, between the parties relating
to the subject matter of this Option Agreement which are not fully expressed herein, in
the Subscription Agreement or in the Certificate of Designations, Preferences and
Rights relating to the Preferred Stock, and all prior agreements, to the extent they
pertain to the subject matter herein, are canceled and of no further force or effect.
This Option Agreement may not be amended or modified except in a writing signed by the
parties hereto.
	 
	 	15.	 	BINDING EFFECT. This Option Agreement shall be binding upon and inure
to the benefit of the Company and the Holder. Nothing in this Option Agreement is
intended or shall be construed to confer upon any other person any right, remedy or
claim, in equity or at law, or to impose upon any other person any duty, liability or
obligation.

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     IN WITNESS WHEREOF, the parties have caused this Option Agreement to be duly executed as of
the date first above written.

	 	 	 	 	 	 	 
	 	 	REGEN BIOLOGICS, INC.	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 
	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 
	 	 
	 
	 	 	 	 	 	 
	 	 	NAME OF HOLDER:	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 	 
	 
	 	 	 	 	 	 
	 	 	SIGNATURE:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 
	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 
	 	 

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EXHIBIT A

OPTION EXERCISE FORM

______________, 200_

ReGen Biologics, Inc.

509 Commerce Street

Franklin Lakes, NJ 07417

Attention: Brion D. Umidi

Telecopy: 201.651.5141

     The undersigned hereby irrevocably elects to exercise its rights under the Option Agreement
dated ___ ______, 2007 made by and between ReGen Biologics, Inc. and the undersigned, by
purchasing the number of Option Shares listed below and hereby makes payment of the Exercise Amount
listed below.

	 	 	 	 	 
	Number of Option Shares Purchased
	 	 	                                   	 
	 
	Exercise Price Per Share:
	 	$	                    	 
	 
	Exercise Amount:
	 	$	                    	 

     The undersigned hereby represents and warrants to the Company that all of the representations
and warranties made by the Holder in Section 7(b) of the Option Agreement are true and correct as
of the date set forth above.

     Please register and deliver the Option Shares in the name and to the address set forth below.

	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	 	 	 
	 	 
	 	 	(Please typewrite or print in block letters)	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 

	 	 	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 
	 	 
	 
	 	 	 	 	 	 
	 	 	NAME OF HOLDER:	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 	 
	 
	 	 	 	 	 	 
	 	 	SIGNATURE OF HOLDER:	 	 

	 	 	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:exv4w1

 

Exhibit 4.1

CONSENT TO CREDIT AGREEMENT

     THIS CONSENT TO CREDIT AGREEMENT (this “Consent”), dated as of March 30, 2007 is
entered into among RADIO ONE, INC., a Delaware corporation (the “Borrower”), the lenders
listed on the signature pages hereof as Lenders (the “Lenders”), and WACHOVIA BANK,
NATIONAL ASSOCIATION, as Administrative Agent (the “Administrative Agent”).

BACKGROUND

     A. The Borrower, the Lenders, Bank of America, N.A., as syndication agent, Credit Suisse,
Merrill Lynch, Pierce Fenner & Smith Incorporated, and SunTrust Bank, as co-documentation agents,
and the Administrative Agent are parties to that certain Credit Agreement, dated as of June 13,
2005 (as the same has been amended, restated or modified from time to time, the “Credit
Agreement”). The terms defined in the Credit Agreement and not otherwise defined herein shall
be used herein as defined in the Credit Agreement.

     B. As disclosed by the Borrower in its current report on Form 8-K, filed with the Securities
and Exchange Commission on March 16, 2007 (the “March 16 8-K”), the Borrower is conducting
a review of its historical stock option granting practices from May 5, 1999 and, because the
Borrower has not completed its review, the Borrower was unable to file its annual report on Form
10-K for the year ended December 31, 2006 by March 16, 2007, the date upon which the Form 10-K was
due. The Borrower intends to file its annual report on Form 10-K as soon as practicable after the
completion of its review, and has requested a consent from the Lenders to extend the due date for
delivery of the Borrower’s audited consolidated financial statements for the fiscal year ending
December 31, 2006 as required in accordance with Section 5.01(a) of the Credit Agreement.

     NOW, THEREFORE, in consideration of the covenants, conditions and agreements hereafter set
forth, and for other good and valuable consideration, the receipt and adequacy of which are all
hereby acknowledged, the parties hereto covenant and agree as follows:

     1. CONSENT. Subject to the satisfaction of the conditions of effectiveness set forth
in Section 3 hereof, the Required Lenders hereby consent to the extension of the due date
to May 15, 2007 for delivery of the Borrower’s audited consolidated financial statements for the
fiscal year ending December 31, 2006 required in accordance with Section 5.01(a) of the Credit
Agreement. This Consent is limited in scope and does not affect any other covenants or provisions
of the Credit Agreement or any other Loan Document.

     2. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its execution and
delivery hereof, the Borrower represents and warrants that, as of the Effective Date (as defined
herein) and after giving effect to the consent set forth in the foregoing Section 1:

     (a) the representations and warranties contained in the Credit Agreement and the other Loan
Documents are true and correct on and as of the Effective Date as made on and as of such date,
except to the extent that such representations and warranties specifically refer to an earlier
date, in which case they shall be true and correct as of such earlier date and except to the extent
expressly disclosed by the Borrower in the March 16 8-K; and

1

 

     (b) no event has occurred and is continuing which constitutes a Default or Event of Default.

     3. CONDITIONS OF EFFECTIVENESS. This Consent shall not be effective until the
satisfaction of each of the following conditions precedent:

     (a) the representations and warranties set forth in Section 2 of this Consent shall be
true and correct;

     (b) the Administrative Agent shall have received counterparts of this Consent executed by the
Required Lenders; and

     (c) the Administrative Agent shall have received counterparts of this Consent executed by the
Borrower and Guarantors.

     4. REFERENCE TO THE CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS.

     (a) Upon and during the effectiveness of this Consent, each reference in the Credit Agreement
and the other Loan Documents to “this Agreement”, “hereunder”, or words of like import shall mean
and be a reference to the Credit Agreement or the other Loan Documents, as the case may be, as
affected by this Consent.

     (b) Except as expressly set forth herein, this Consent shall not by implication or otherwise
limit, impair, constitute an amendment of, or otherwise affect the rights or remedies of the
Administrative Agent or the Lenders under the Credit Agreement or any of the other Loan Documents,
and shall not alter, modify, amend, or in any way affect the terms, conditions, obligations,
covenants, or agreements contained in the Credit Agreement or the other Loan Documents, all of
which are hereby ratified and affirmed in all respects and shall continue in full force and effect.
Nothing herein shall be deemed to entitle the Borrower, Guarantors or Lenders to a consent to, or
a waiver, amendment, modification or other change of, any of the terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement or any other Loan Documents in similar or
different circumstances.

     (c) Notwithstanding that such consent is not required hereunder, each of the Guarantors hereby
consents to the execution and delivery of this Consent and reaffirm its respective obligations
under the Guarantee and Collateral Agreement.

     5. COSTS AND EXPENSES. The Borrower shall be obligated to pay the costs and expenses
of the Administrative Agent in connection with the preparation, reproduction, execution and
delivery of this Consent and the other instruments and documents to be delivered hereunder.

     6. EXECUTION IN COUNTERPARTS. This Consent may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original but all such counterparts together shall
constitute but one and the same instrument and signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all signature

2

 

pages are physically attached to the same document. For purposes of this Consent, a
counterpart hereof (or signature page thereto) signed and transmitted by any Person party hereto to
the Administrative Agent (or its counsel) by facsimile machine, telecopier or electronic mail is to
be treated as an original. The signature of such Person thereon, for purposes hereof, is to be
considered as an original signature, and the counterpart (or signature page thereto) so transmitted
is to be considered to have the same binding effect as an original signature on an original
document. This Consent shall become effective when the Administrative Agent has received
counterparts of this Consent executed by the Borrower and the Required Lenders and each of the
conditions precedent set forth in Section 3 have been satisfied (the “Effective
Date”).

     7. GOVERNING LAW; BINDING EFFECT. This Consent shall be governed by and construed in
accordance with the laws of the State of New York. This Consent shall be binding upon the Borrower
and each Lender and their respective successors and assigns.

     8. HEADINGS. Section headings in this Consent are included herein for convenience of
reference only and shall not constitute a part of this Consent for any other purpose.

     9. ENTIRE AGREEMENT. THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AFFECTED
BY THIS CONSENT, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AS TO THE SUBJECT MATTER THEREIN
AND HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS BETWEEN THE PARTIES.

[Remainder of Page Left Intentionally Blank]

3

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first above written.

	 	 	 	 	 
	 	BORROWER:

RADIO ONE, INC.

 	 
	 	By:  	/s/ Scott R. Royster
 	 
	 	 	Name:  	Scott R. Royster 	 
	 	 	Title:  	Exec Vice Pres & CFO 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 
	 

	 	OTHER GUARANTORS
	 

	 	(for purposes of Section 4 hereof):
	 
	 	 
	 

	 	RADIO ONE, INC.
	 

	 	RADIO ONE LICENSES, LLC
	 

	 	BELL BROADCASTING COMPANY
	 

	 	RADIO ONE OF DETROIT, LLC
	 

	 	RADIO ONE OF ATLANTA, LLC
	 

	 	ROA LICENSES, LLC
	 

	 	RADIO ONE OF CHARLOTTE, LLC
	 

	 	CHARLOTTE BROADCASTING, LLC
	 

	 	RADIO ONE OF NORTH CAROLINA, LLC
	 

	 	RADIO ONE OF AUGUSTA, LLC
	 

	 	RADIO ONE OF BOSTON, INC.
	 

	 	RADIO ONE OF BOSTON LICENSES, LLC
	 

	 	RADIO ONE OF INDIANA, LLC
	 

	 	RADIO ONE OF TEXAS I, LLC
	 

	 	RADIO ONE OF TEXAS II, LLC
	 

	 	BLUE CHIP BROADCASTING, LTD.
	 

	 	BLUE CHIP BROADCASTING LICENSES, LTD.
	 

	 	SATELLITE ONE, L.L.C.
	 

	 	HAWES-SAUNDERS BROADCAST PROPERTIES, INC.
	 

	 	RADIO ONE OF DAYTON LICENSES, LLC
	 

	 	NEW MABLETON BROADCASTING CORPORATION
	 

	 	RADIO ONE MEDIA HOLDINGS, LLC
	 

	 	RADIO ONE CABLE HOLDINGS, INC.

	 	 	 	 	 
	 	 	 
	 	By:  	                                              /s/ Scott R. Royster
 	 
	 	 	Name:  	Scott R. Royster 	 
	 	 	Title:  	Exec Vice Pres & CFO 	 
	 
	 	RADIO ONE OF INDIANA, L.P.

 	 
	 	By:  	Radio One, Inc.,
 	 
	 	 	its general partner 	 
	 	 	 	 
	 
	 	 	 

	 	 	 	 	 
	 	By:  	                                              /s/ Scott R. Royster
 	 
	 	 	Name:  	Scott R. Royster 	 
	 	 	Title:  	Exec Vice Pres & CFO 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 
	 	RADIO ONE OF TEXAS, L.P.

 	 
	 	By:  	Radio One of Texas I, LLC,
 	 
	 	 	its general partner 	 
	 	 	 	 
	 
	 	 	 

	 	 	 	 	 
	 	By:  	                                              /s/ Scott R. Royster
 	 
	 	 	Name:  	Scott R. Royster 	 
	 	 	Title:  	Exec Vice Pres & CFO 	 

	 	 	 	 	 
	 
	 	SYNDICATION ONE, INC.

 	 
	 	By:  	/s/ Scott R. Royster
 	 
	 	 	Name:  	Scott R. Royster 	 
	 	 	Title:  	Exec Vice Pres & CFO 	 
	 
	 	MAGAZINE ONE, INC.

 	 
	 	By:  	/s/ Scott R. Royster
 	 
	 	 	Name:  	Scott R. Royster 	 
	 	 	Title:  	Exec Vice Pres & CFO 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 
	 

	 	ADMINISTRATIVE AGENT, ISSUING BANK

AND REQUIRED LENDERS:
	 
	 	 
	 

	 	WACHOVIA BANK, NATIONAL ASSOCIATION,
	 

	 	as Administrative Agent, Issuing Bank
and as a Lender

	 	 	 	 	 
	 	 	 
	 	By:  	                                              /s/ Russ Lyons
 	 
	 	 	Name:  	Russ Lyons  	 
	 	 	Title:  	Director 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A.,

as Syndication Agent, Issuing Bank and as a Lender

 	 
	 	By:  	/s/ Todd Shipley
 	 
	 	 	Name:  	Todd Shipley 	 
	 	 	Title:  	Senior Vice President 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 
	 	CREDIT SUISSE, CAYMAN ISLANDS BRANCH,

as Co-Documentation Agent and as a Lender

 	 
	 	By:  	/s/ Doreen Barr
 	 
	 	 	Name:  	Doreen Barr 	 
	 	 	Title:  	Vice President 	 
	 
	 
	 	By:  	/s/ Laurence Lapeyre
 	 
	 	 	Name:  	Laurence Lapeyre 	 
	 	 	Title:  	Associate 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 
	 	MERRILL LYNCH, PIERCE FENNER & SMITH INCORPORATED,

as Co-Documentation Agent

 	 
	 	By:  	/s/ Nancy Meadows
 	 
	 	 	Name:  	Nancy Meadows  	 
	 	 	Title:  	Vice President 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 
	 	Merrill Lynch Capital Corporation,

as a Lender

 	 
	 	By:  	/s/ Nancy Meadows
 	 
	 	 	Name:  	Nancy Meadows  	 
	 	 	Title:  	Vice President 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 
	 	SUNTRUST BANK,

as Co-Documentation Agent and as a Lender

 	 
	 	By:  	/s/ Kip Hurd
 	 
	 	 	Name:  	Kip Hurd 	 
	 	 	Title:  	Director 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 
	 	NATIONAL CITY BANK,

as a Lender

 	 
	 	By:  	/s/ Elizabeth Brosky
 	 
	 	 	Name:  	Elizabeth Brosky 	 
	 	 	Title:  	Vice President 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 
	 	DIAMOND SPRINGS TRADING LLC, 

as a Lender

 	 
	 	By:  	/s/ L. Murchison Taylor
 	 
	 	 	Name:  	L. Murchison Taylor  	 
	 	 	Title:  	Vice President 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 
	 	CALYON NEW YORK BRANCH, 

as a Lender

 	 
	 	By:  	/s/ Tanya Crossley
 	 
	 	 	Name:  	Tanya Crossley 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	                      /s/ John McCloskey
 	 
	 	 	Name:  	John McCloskey 	 
	 	 	Title:  	Managing Director 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 	 	 	 	 
	 	Bank of Scotland,

as a Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 	By:	 	/s/ Karen Weich	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Karen Weich	 	 
	 

	 	 	 	Title:
	 	Vice President	 	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 
	 	GENERAL ELECTRIC CAPITAL CORPORATION,

as a Lender

 	 
	 	By:	/s/ Karl Kieffer
 
	 	Name: 	Karl Kieffer 	 
	 	Title:	Duly Authorized Signatory 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 	 	 
	 	 	COÖPERATIEVE CENTRALE RAIFFEISEN-	 	 
	 	 	BOERENLEENBANK B.A., “RABOBANK	 	 
	 	 	NEDERLAND”, NEW YORK BRANCH,	 	 
	 	 	as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Laurie Blazek	 	 
	 

	 	 	 	 

Name:  Laurie Blazek
	 	 
	 

	 	 	 	Title:  Executive Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brett Delfino	 	 
	 

	 	 	 	 

Name:  Brett Delfino
	 	 
	 

	 	 	 	Title:  Executive Director	 	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 	 	 
	 	 	BLACK DIAMOND CLO 2006-1(CAYMAN), Ltd.	 	 
	 	 	By: Black Diamond CLO 2006-1 Adviser, L.L.C.	 	 
	 	 	As Its Collateral Manager,	 	 
	 	 	as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Stephen H. Deckoff	 	 
	 

	 	 	 	 

Name:  Stephen H. Deckoff
	 	 
	 

	 	 	 	Title:  Managing Principal	 	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 	 	 
	 	 	The Royal Bank of Scotland plc,	 	 
	 	 	as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Andrew Wynn	 	 
	 

	 	 	 	 

Name:  Andrew Wynn
	 	 
	 

	 	 	 	Title:  Managing Director	 	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 
	 	AIB Debt Management Limited,  
 as a
Lender

 	 
	 	By:  	/s/ Roisin O’Connell
 	 
	 	 	Name:  	Roisin O’Connell                                	 
	 	 	Title:  	Vice  President 
Investment
Advisor to AIB Debt  Management, Limited 	 
	 
	 	 	 
	 	By:  	 /s/ Anthony O’Reilly
 	 
	 	 	Name:  	Anthony O’Reilly  	 
	 	 	Title:  	Senior Vice  President 
Investment
Advisor to AIB Debt  Management, Limited 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 
	 	Allied Irish Banks, plc., 

as a Lender

 	 
	 	By:  	/s/ Roisin O’Connell
 	 
	 	 	Name:  	Roisin O’Connell 	 
	 	 	Title:  	Vice  President 	 
	 
	 	 	 
	 	By:  	                                     /s/ Anthony O’Reilly
 	 
	 	 	Name:  	Anthony O’Reilly 	 
	 	 	Title:  	Senior Vice  President 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.,

as a Lender

 	 
	 	By:  	/s/ Christophe Vohmann
 	 
	 	 	Name:  	Christophe Vohmann 	 
	 	 	Title:  	Vice President 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

 

 

	 	 	 	 	 
	 	Grand Central Asset Trust, BDC Series, 

as a Lender 

 	 
	 	By:  	/s/ Molly Walter
 	 
	 	 	Name:  	Molly Walter 	 
	 	 	Title:  	Attorney-In-Fact 	 
	 

CONSENT TO CREDIT AGREEMENT — SIGNATURE PAGE

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