Document:

exv4w15

 

EXHIBIT 4.15

COMMON STOCK REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement is made and entered into as of April
19, 2004 (this “Agreement”), by and among ReGen Biologics, Inc., a
Delaware corporation (the “Company”) and each of the holders of the
Common Stock, par value $0.01 of the Company (the “Common Stock”) listed
on Schedule 1 attached hereto (individually, a “Stockholder” and,
collectively, the “Stockholders”).

     WHEREAS, the Company, the holders of the Series A Convertible Preferred
Stock, par value $0.01 per share, of the Company (the “Series A
Preferred”) and the holders of the Series C Convertible Preferred Stock,
par value $0.01 per share, of the Company (the “Series C Preferred”) are
parties to that certain Amended and Restated Registration Rights Agreement
dated September 30, 2003 (the “Prior Rights Agreement”) providing for
certain registration rights; and

     WHEREAS, pursuant to the terms of the Common Stock Purchase Agreement,
dated as of April 19, 2004 by and among the Company and the Purchasers named
therein (the “Common Stock Purchase Agreement”), the Company has agreed
to provide to the purchasers of such Common Stock certain registration rights
under the 1933 Act with respect to shares of the Company’s Common Stock.

     Now, therefore, the parties hereto agree as follows:

     1. Definitions; Certain Rules of Construction. Certain capitalized
terms are used in this Agreement with the specific meanings defined below in
this Section 1. Except as otherwise explicitly specified to the contrary or
unless the context clearly requires otherwise, (a) the capitalized term Section
refers to sections of this Agreement, (b) the capitalized term Exhibit refers
to exhibits to this Agreement, (c) references to a particular Section include
all subsections thereof, (d) the word including shall be construed as including
without limitation, (e) references to a particular statute or regulation
include all rules and regulations thereunder and any successor statute,
regulation or rules, in each case as from time to time in effect, (f) words in
the singular or plural form include the plural and singular form, respectively,
and (g) references to a particular Person include such Person’s successors and
assigns to the extent not prohibited by this Agreement.

     1.1. 1933 Act means the Securities Act of 1933, as amended, and all
regulations thereunder.

 

 

     1.2. 1934 Act means the Securities Exchange Act of 1934, as
amended, and all regulations thereunder.

     1.3. Board of Directors means the Board of Directors of the
Company.

     1.4. Common Stock means the Company’s common stock, par value $.01
per share, and other securities issued in respect of shares of Common Stock.
The number of shares of Common Stock covered by this Agreement and owned by
each Stockholder is set forth opposite such Stockholder’s name on Schedule
1.

     1.5 Common Stock Initiating Holder is defined in Section 2.1.

     1.6. Common Stock Registrable Securities means (i) any shares of
Common Stock of the Company issued or issuable to the Stockholders pursuant to
the Common Stock Purchase Agreement and (ii) any shares of Common Stock or
other capital stock issuable upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event with respect to any of
the foregoing after the date hereof, excluding in all cases, however, any
Common Stock Registrable Securities sold by a Person in a transaction in which
rights under this Agreement are not assigned in accordance with this Agreement
or any Common Stock Registrable Securities able to be sold to the public or
pursuant to Rule 144(k).

     1.7 Company is defined in the recitals to this Agreement.

     1.8. Company Indemnitees is defined in Section 2.8(b).

     1.9. Expiration Date means the fifth anniversary of the date of
this Agreement.

     1.10. Form S-1, Form S-3, and Form S-4 mean such
respective registration forms in effect on the date hereof (or any successor
registration forms subsequently adopted by the SEC) under the 1933 Act.

     1.11. Holder means (a) any Person that owns, or has the right to
acquire, Common Stock Registrable Securities and (b) any assignee thereof in
accordance with Section 2.12.

     1.12. Holder Indemnitee is defined in Section 2.8(a).

     1.13. Indemnitee means each of the Company Indemnitees and the
Holder Indemnitees.

     1.14. Initial Registration Statement is defined in Section 2.2(b).

 

 

     1.15. Lock-Up Period shall have the meaning set forth in the
Lock-Up Agreement between the Company and the Stockholders dated as of the same
date as this Agreement.

     1.16. Ninety Day Withdrawal Provision is defined in Section 2.3.

     1.17. Person means any present or future natural person or any
corporation, association, partnership, joint venture, limited liability, joint
stock or other company, business trust, trust, organization, business or
government or any governmental agency or political subdivision thereof.

     1.18. Prior Rights Holder means the holders of the Series A
Preferred and Series C Preferred who are a party to the Prior Rights Agreement.

     1.19. register, registered and registration refer to
a registration effected by preparing and filing a registration statement or
similar document in compliance with the 1933 Act and the automatic
effectiveness, or the declaration or ordering of effectiveness, of such
registration statement or document.

     1.20. Registrable Securities means (i) Common Stock Registrable
Securities and (ii) any shares with respect to which the Company is obligated
to provide registration rights pursuant to the Prior Rights Agreement.

     1.21. Rule 144 is defined in Section 2.10(a).

     1.22. SEC means the Securities and Exchange Commission.

     1.23. Significant Stockholder is defined in Section 2.12.

     1.24. Stockholder and Stockholders are defined in the
recitals to this Agreement.

     1.25. Violation means, with respect to any registration statement
which includes any Common Stock Registrable Securities:

     (a) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto;

     (b) the omission or 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; or

 

 

     (c) any violation or alleged violation by the Company of the 1933
Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the 1933 Act, the 1934 Act or any state securities law
in connection with any matter relating to such registration statement.

	2	 	Registration Rights.
	 
	2.1.	 	Demand Registration.
	 
	 	 	(a) At any time after the date that is 150 days after the closing
of the Common Stock Purchase Agreement, if the Company shall
receive a written request from the Holders of not less than 25% of
the Common Stock Registrable Securities then outstanding and
entitled to registration rights under this Section 2 held by the
Common Stockholders (the “Common Stock Initiating Holders”)
that the Company effect the registration under the 1933 Act of an
amount of Common Stock Registrable Securities set forth in the
written request, then the Company shall, within ten days of the
receipt thereof, give written notice of such request to all
Holders. Such Holders shall have the right, by giving written
notice to the Company within 20 days from receipt of the Company’s
notice, to elect to have included in such registration such of
their Common Stock Registrable Securities as such Holders may
request in such notice of election. Subject to the limitations of
this Section 2.1, the Company shall use commercially reasonable
efforts to effect such a registration statement as soon as
practicable and in any event to file a registration statement
under the 1933 Act within forty-five (45) days of the receipt of
such request if the Company is eligible to use Form S-3 or, if the
Company is not eligible to use Form S-3, within sixty (60) days of
such request, covering all the Common Stock Registrable Securities
which the Holders shall in writing request to be included in such
registration and to use commercially reasonable efforts to have
such registration statement become effective. The registration
statement filed pursuant to the request of the Common Stock
Initiating Holders may, subject to the cutback provisions of
Section 2.1(b) below, include other securities of the Company that
are held by officers and directors of the Company, or that are
held by Persons who, by virtue of agreements with the Company, are
entitled to include their securities in any such registration
	 
	 	 	(b) If the Common Stock Initiating Holders intend to distribute
the Common Stock Registrable Securities covered by their request
by means of an underwriting, they shall so advise the Company as
part of their

 

 

	 	 	request made pursuant to this Section 2.1 and the
Company shall include such information in the written notice
referred to in Section 2.1(a). In such event, the right of any
Holder to include its Common Stock Registrable Securities in such
registration shall be conditioned upon such Holder’s participation
in such underwriting and the inclusion of such Holder’s Common
Stock Registrable Securities in the underwriting (unless otherwise
mutually agreed by a majority in interest of the Initiating
Holders and such Holder) to the extent provided herein. All
Holders proposing to distribute their securities through such
underwriting shall (together with the Company as provided in
Section 2.3(d)) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such
underwriting by a majority in interest of the Common Stock
Initiating Holders and approved by the Board of Directors, which
approval shall not be unreasonably withheld. Notwithstanding any
other provision of this Section 2.1, if, in the case of a
registration requested pursuant to Section 2.1, the underwriter
advises the Company and the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to
be underwritten, then the Company shall so advise all Holders of
Common Stock Registrable Securities which would otherwise be
underwritten pursuant hereto, and all securities other than Common
Stock Registrable Securities sought to be included in the
underwriting shall first be excluded. If further reduction is
required, the number of Common Stock Registrable Securities that
may be included in the underwriting shall be reduced pro rata
among all Holders thereof desiring to participate in such
underwriting (according to the number of Common Stock Registrable
Securities then held by each such Holder). No Common Stock
Registrable Securities requested by any Holder to be included in a
registration pursuant to Section 2.1 shall be excluded from the
underwriting unless all securities other than Common Stock
Registrable Securities are first excluded.
	 
	 	 	(c)  The Company is obligated to effect only two (2) registrations
pursuant to Section 2.1, counting for this purpose only a
registration which has been declared effective.
	 
	 	 	(d)  Notwithstanding the provisions of this Section 2.1, in the
event that the Company is requested to file any registration
statement pursuant to Section 2.1:

	(i)	 	    The Company shall not be obligated to effect
the filing of such registration statement in any particular
jurisdiction in which the Company would be required to
qualify to do business or to

 

 

	 	 	execute a general consent to
service of process in effecting such registration,
qualification or compliance;
	 
	(ii)	 	    the Company shall not be obligated to effect
the filing of such registration statement during the period
starting with the date sixty (60) days prior to the date of
the Company’s good faith estimate of the filing of, and
ending on a date one hundred eighty (180) days following the
effective date of any other registration statement pertaining
to a public offering of securities for the account of the
Company; and
	 
	(iii)	 	    if the Company shall furnish to the Common
Stock Initiating Holders a certificate signed by the
President of the Company stating that, in the good faith
judgment of the Board of Directors, it would not be in the
best interests of the Company and its stockholders generally
for such registration statement to be filed, the Company
shall have the right to defer such filing for a period of not
more than one hundred twenty (120) days after receipt of the
request of the relevant Common Stock Initiating Holders;
provided, however, that the Company may not
utilize the right set forth in this Section 2.1(d)(iii) more
than once in any 12-month period. Such certificate and any
information disclosed therein shall be deemed confidential
information of the Company and each of the Holders agrees not
to disclose such information except, to the extent required,
to its legal and financial advisors, and then only to the
extent such advisors agree to be bound by this
confidentiality provision.

	(e)	 	     Each registration requested pursuant to Section 2.1 shall be
effected by the filing of a registration statement on Form S-3 (if
applicable) (or if such form is not available, Form S-1 or any other
form which includes substantially the same information (other than
information which is incorporated by reference) as would be required
to be included in a registration statement on such form as currently
constituted), unless another form would be equally effective.
	 
	2.2.	 	Incidental Registration.
	 
	(a)	 	  If the Company proposes to register any of its capital stock
under the 1933 Act, whether for its own account or for the account
of stockholders other than the Holders (other than a registration relating solely
to the sale of securities to participants in a Company stock plan,
a registration on

 

 

	 	 	Form S-4 or a registration relating to a
transaction covered by Rule 145 under the 1933 Act, or a
registration in which the only equity securities being registered
are shares of Common Stock issuable upon conversion of debt
securities or newly issued convertible preferred stock being
registered as part of a primary offering), the Company shall, each
such time, promptly give each Holder written notice of such
registration. Upon the written request of any Holder given within
twenty (20) days after mailing of such notice by the Company, the
Company shall, subject to the provisions of Section 2.7, use
commercially reasonable efforts to cause a registration statement
covering all of the Common Stock Registrable Securities that each
such Holder has requested to be registered to become effective
under the 1933 Act. Except as otherwise set forth herein, the
Company shall be under no obligation to complete any offering of
its securities it proposes to make and shall incur no liability to
any Holder for its failure to do so.
	 
	 	(b)	    The Prior Rights Holders have requested that the Company file
a registration statement covering certain shares of the Company’s
Series A Preferred and the Series C Preferred pursuant to the terms
of the Prior Right Agreement. The Company hereby gives notice, as
required by Section 2.2(a), of its intention to use commercially
reasonable efforts to cause such registration statement (the
“Initial Registration Statement”) to be filed. Any Holder shall
have the right to request the registration of such Holder’s shares
by completing Exhibit A attached hereto, or may waive the
right to such registration by completing Exhibit B attached
hereto. The Holders acknowledge that the registration of the Series
A Preferred and the Series C Preferred shares is subject to the
terms and conditions of the Prior Rights Agreement and the
incidental registration rights of the Holders provided by Section
2.2(a) are dependent upon the completion of such registration.

     2.3. Obligations of the Company. Whenever required under this
Section 2 to use commercially reasonable efforts to effect the registration of
any Common Stock Registrable Securities, the Company shall, as expeditiously as
reasonably possible, prepare and file with the SEC a registration statement
with respect to such Common Stock Registrable Securities and use commercially
reasonable efforts to cause such registration statement to become effective,
and, upon the request of the Holders of a majority of the Common Stock
Registrable Securities to be registered thereunder, keep such registration
statement effective for up to one hundred twenty (120) days, or, in the
case of the Initial Registration Statement, for up to one year,
provided, that in the event the Board of Directors of the Company
determines that it is in the best interest of the

 

 

Company to raise additional funds pursuant to one or more private placements of shares of the
Company, the Company may elect not to keep any such registration statement effective for up
to two (2) periods of up to ninety (90) days each in order to complete such
private placement(s) in compliance with state and federal securities laws,
provided, further, that the Company shall not cause the Initial
Registration Statement to become ineffective until the later to occur (the
“Ninety Day Withdrawal Provision”) of (i) ninety (90) days after the
Lock-Up Period expires or (ii) ninety (90) days after the effectiveness of such
Initial Registration Statement, provided, further, that the
period that the Company is obligated to keep any such registration statement
effective will be extended by that number of days that any such registration
statement was not effective as a result of the Company’s actions in
relationship to such private placements; provided, further, that
in the case of any registration of Common Stock Registrable Securities on Form
S-3 that are intended to be offered on a continuous or delayed basis, such 120
day period will be extended, if necessary, to keep the registration statement
effective until all such Common Stock Registrable Securities are sold;
provided, further, that (i) Rule 415, or any successor rule
promulgated under the 1933 Act, permits an offering on a continuous or delayed
basis, and (ii) applicable rules under the 1933 Act governing the obligation to
file a post-effective amendment permit, in lieu of filing a post-effective
amendment which (x) includes any prospectus required by Section 10(a)(3) of the
1933 Act, or (y) reflects facts or events representing a material or
fundamental change in the information set forth in the registration statement,
the incorporation by reference in the registration statement of information
required to be included in (x) or (y) above to be contained in periodic reports
filed pursuant to Section 13 or 15(d) of the 1933 Act. In addition, the
Company shall:

     (a) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with
such registration statement, and use commercially reasonable efforts to
cause each such amendment and supplement to become effective, as may be
necessary to comply with the provisions of the 1933 Act with respect to
the disposition of all securities covered by such registration statement;

     (b) furnish to the Holders such reasonable number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Common Stock
Registrable Securities owned by them;

     (c) use commercially reasonable efforts to register or qualify the
securities covered by such registration statement under such other
securities or blue sky laws of such states and jurisdictions as shall be
reasonably requested by the Holders, except that the Company shall not be
required in connection therewith or as a condition thereto to qualify to
do business or file a general

 

 

consent to service of process or subject
itself to taxation in any such state or jurisdiction;

     (d) in the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering, and
generally provide its cooperation with such managing underwriter,
including making available members of senior management for the
underwriters’ “road show” presentations; provided, however,
that each Holder participating in such underwriting shall also enter into
and perform its obligations under such an underwriting agreement,
including furnishing any opinion of counsel or entering into a lock-up
agreement reasonably requested by the managing underwriter;

     (e) notify each Holder of Common Stock Registrable Securities
covered by such registration statement, at any time when a prospectus
relating thereto covered by such registration statement is required to be
delivered under the 1933 Act, of the happening of any event as a result
of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
then existing and promptly file such amendments and supplements which may
be required pursuant to Section 2.3(a) on account of such event and use
commercially reasonable efforts to cause each such amendment and
supplement to become effective;

     (f) use its commercially reasonable efforts to furnish, at the
request of any Holder requesting registration of Common Stock Registrable
Securities pursuant to this Section 2, on the date that such Common Stock
Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Section 2, if such
securities are being sold through underwriters, or if not, on the date
that the registration statement with respect to such securities becomes
effective, (i) an opinion or opinions, dated such date, of the counsel
representing the Company for the purposes of such registration, in form
and substance as is customarily given by company counsel to the
underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders requesting registration of
Common Stock Registrable Securities and (ii) a letter dated such date,
from the independent certified public
accountant 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, if any, and
to the Holders requesting registration of Common Stock Registrable
Securities;

 

 

     (g) apply for listing and use commercially reasonable efforts to
list the Common Stock Registrable Securities being registered on any
national securities exchange on which a class of the Company’s equity
securities is listed or, if the Company does not have a class of equity
securities listed on a national securities exchange, apply for
qualification and use commercially reasonable efforts to qualify the
Common Stock Registrable Securities being registered for inclusion on the
automated quotation system of the National Association of Securities
Dealers, Inc. if a class of the Company’s equity securities are already
so qualified; and

     (h) take all necessary action to the extent commercially reasonable,
including the filing of post-effective amendments, to permit the Holders
to include their Common Stock Registrable Securities in such registration
in accordance with the terms of this Section 2.

	 	2.4.	 	Furnish Information.

     (a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 2 in respect of the
Common Stock Registrable Securities of any selling Holder that such
selling Holder shall furnish to the Company such information regarding
itself, the Common Stock Registrable Securities held by it, and the
intended method of disposition of such Common Stock Registrable
Securities as shall be required to effect the registration of such Common
Stock Registrable Securities. The Company shall have no responsibility
to any selling Holder, to the extent such selling Holder fails to provide
such information in a timely manner, and if the Company, acting
reasonably, determines it appropriate, the Company may delay the filing
of any such registration statement until the Holder provides such
information or exclude the Holder’s securities from the registration.

     (b) No Holder shall distribute any prospectus or make any offer to
sell (or solicit any offer to purchase) or sell any Registrable
Securities in a transaction covered by a prospectus from and after the
time that the Company notifies the Holder that the prospectus fails to
state a material fact, contains a material misstatement or fails to state
a fact necessary in order to make the statements included in the
prospectus not misleading until the Company has provided a revised,
amended or supplemented prospectus that corrects the misstatement or
omission and, if so directed by the Company, each Holder will deliver to
the Company (at the Company’s expense) all copies of the prospectus
covering such Registrable Securities that is current at the time of the
receipt of the notice then in the Holder’s possession, excluding one file
copy which may be retained by the Holder.

 

 

     (c) Each Holder shall comply with the prospectus delivery
requirements of the Securities Act in connection with offers to sell,
solicitations of offers to purchase, and sales of Registrable Securities
in connection with any offer or sale pursuant to a registration
statement.

     2.5. Expenses of Demand Registration. The Company shall bear all
expenses relating to Common Stock Registrable Securities incurred in connection
with each registration, filing or qualification pursuant to Section 2.1,
including all registration, filing and qualification fees, printing and
accounting fees, fees and disbursements of counsel for the Company and the
reasonable fees and disbursements of one counsel for the selling Holders;
provided, however, that all underwriting discounts and
commissions, if any, and transfer taxes relating to Common Stock Registrable
Securities included in any registration effected pursuant to Section 2.1 will
be borne and paid ratably by the Holders of such Common Stock Registrable
Securities.

     2.6. Expenses of Company Registration. The Company shall bear and
pay all expenses incurred in connection with any registration, filing or
qualification of Common Stock Registrable Securities with respect to any
registration pursuant to Section 2.2 for each Holder, including all
registration, filing and qualification fees, printing and accounting fees, fees
and disbursements of counsel for the Company and the reasonable fees and
disbursements of one counsel for the selling Holders; provided,
however, that all underwriting discounts and commissions, if any, and
transfer taxes relating to Common Stock Registrable Securities included in any
registration effected pursuant to Section 2.2 will be borne and paid ratably by
the Holders of such Common Stock Registrable Securities.

     2.7. Underwriting Requirements. In connection with any offering
involving an underwriting of securities being issued by or for the account of
the Company, the Company shall not be required under Section 2.2 to include any
of the Holders’ securities in such underwriting unless such Holders accept the
terms of the underwriting as agreed upon between the Company and the
underwriters selected by it, and then only in such quantity, if any, as will
not, in the good faith opinion of the underwriters, adversely affect the
success of the offering by the Company. If the managing underwriter for the
offering shall advise the Company in writing that the total amount of
securities, including Registrable Securities, requested to be included in such
offering exceeds the amount of securities to be sold that can be successfully
offered, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities, which the managing underwriter
determines in its sole discretion will not adversely affect the success of the
offering. The securities so included in the offering will be reduced as
follows:

 

     (a) first, all securities which stockholders other than the Company,
the Prior Rights Holders and the Holders seek to include in the offering
shall be excluded from the offering to the extent limitation on the
number of shares included in the underwriting is required; and

     (b) if further limitation on the number of shares to be included in
the offering is required after elimination of all shares held by selling
stockholders other than Prior Rights Holders and the Holders of Common
Stock Registrable Securities, then the shares held by the Prior Rights
Holders shall be included pursuant to the terms of the Prior Rights
Agreement, and thereafter, the securities that may be included in the
underwriting by the Holders shall be included but shall be reduced pro
rata among the selling Holders in accordance with the number of shares of
Common Stock Registrable Securities held by each such Holder.

For purposes of the preceding sentence concerning apportionment, for any
selling stockholder which is a Holder of Common Stock Registrable Securities
and which is a partnership or a corporation, the partners, retired partners and
stockholders of such Holder, or the estates and family members of such partners
and retired partners and any trusts for the benefit of any of the foregoing
persons shall collectively be deemed to be a “selling Holder,” and any pro rata
reduction with respect to such “selling Holder” shall be based upon the
aggregate number of shares carrying registration rights owned by all entities
and individuals included in such “selling Holder,” as defined in this sentence.

     2.8. Indemnification. In the event any Common Stock Registrable
Securities are included in a registration statement under this Section 2:

     (a) The Company will indemnify and hold harmless each Holder, the
officers, directors, partners, agents and employees of each Holder, any
underwriter (as defined in the 1933 Act) for such Holder and each Person,
if any, who controls, or is controlled by, such Holder or underwriter
within the meaning of the 1933 Act or the 1934 Act (collectively, the
“Holder Indemnitees”), against any losses, claims, damages or
liabilities (joint or several) to which they may become subject under the
1933 Act, the 1934 Act or any 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. The Company will reimburse
each Holder Indemnitee for any legal or other expenses reasonably
incurred by such Holder Indemnitee in connection with investigating or
defending any such loss, claim, damage, liability or action. The indemnity
agreement contained in this Section 2.8(a) shall not apply to amounts
paid in settlement of any loss, claim, damage, liability or action if
such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the

 

 

Company be
liable to any Holder Indemnitee in any such case for any such loss,
claim, damage, liability or action (i) to the extent that it arises out
of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in
connection with such registration by or on behalf of such Holder
Indemnitee; or supplied by another Holder or (ii) in the case of a sale
directly by a Holder of Common Stock Registrable Securities (including a
sale of such Common Stock Registrable Securities through any underwriter
retained by such Holder engaging in a distribution solely on behalf of
such Holder), such untrue statement or alleged untrue statement or
omission or alleged omission was contained in a preliminary prospectus
and corrected in a final or amended prospectus which was timely delivered
to such Holder, and such Holder failed to deliver a copy of the final or
amended prospectus at or prior to the confirmation of the sale of the
Common Stock Registrable Securities to the Person asserting any such
loss, claim, damage or liability in any case in which such delivery is
required by the 1933 Act.

     (b) Each Holder that includes any Common Stock Registrable
Securities in any registration statement (i) will indemnify and hold
harmless the Company, each of its directors, each of its officers who
have signed the registration statement, each Person, if any, who controls
or is controlled by the Company within the meaning of the 1933 Act or the
1934 Act, each agent and any underwriter for the Company, and any other
Holder or other stockholder selling securities in such registration
statement or any of its directors, officers, partners, agents or
employees or any Person who controls such Holder or such other
stockholder or such underwriter within the meaning of the 1933 Act or the
1934 Act (collectively, the “Company Indemnitees”), against any
losses, claims, damages or liabilities (joint or several) to which any
Company Indemnitee may become subject under the 1933 Act, the 1934 Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with
written information furnished by or on behalf of such Holder expressly
for use in connection with such registration and (ii) will reimburse any
legal or other expenses reasonably incurred by any Company Indemnitee in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the liability
of any Holder hereunder shall be limited to the amount of net proceeds
(after deduction of all underwriters’ discounts and commissions paid by
such Holder in connection with the registration in question) received by such Holder in the
offering giving rise to the Violation, less the aggregate purchase price
of the Holder’s Common Stock Registrable Securities; and provided,
further, that the indemnity agreement contained in this Section
2.8(b) shall not apply to amounts paid in settlement of any such loss,
claim,

 

 

damage, liability or action if such settlement is effected without
the consent of such Holder (which consent shall not be unreasonably
withheld) nor, in the case of a sale directly by the Company of its
securities (including a sale of such securities through any underwriter
retained by the Company to engage in a distribution solely on behalf of
the Company), shall such Holder be liable to the Company in any case in
which such untrue statement or alleged untrue statement or omission or
alleged omission was contained in a preliminary prospectus and corrected
in a final or amended prospectus, and the Company failed to deliver a
copy of the final or amended prospectus at or prior to the confirmation
of the sale of the securities to the Person asserting any such loss,
claim, damage or liability in any case in which such delivery is required
by the 1933 Act.

     (c) Promptly after receipt by any Company Indemnitee or Holder
Indemnitee (collectively, the “Indemnitees”) under this Section
2.8 of notice of the commencement of any action (including any
governmental action), such Indemnitee will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.8,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate
in, and, to the extent the indemnifying party so desires, jointly with
any other indemnifying party similarly noticed, to assume and control the
defense thereof with counsel mutually satisfactory to the parties;
provided, however, that such Indemnitee (together with all
other Indemnitees which may be represented without conflict by one
counsel) shall have the right to retain its own counsel, with the
reasonable fees and expenses to be paid by the indemnifying party, if
representation of such Indemnitee by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential
differing interests, as reasonably determined by either party, between
such Indemnitee and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action,
shall relieve such indemnifying party of any liability to the Indemnitee
under this Section 2.8, but only to the extent that the failure to notify
the indemnifying party is 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 it of any liability that it may
have to such Indemnitee otherwise than under this Section 2.8.

     (d) The obligations of the Company and the Holders under this
Section 2.8 shall survive the completion of any offering of Common Stock
Registrable Securities in a registration statement whether under this
Section 2 or otherwise.

     (e) If the indemnification provided for in this Section 2.8 is held
by a court of competent jurisdiction to be unavailable to a party that
would have been

 

 

an Indemnitee under this Section 2.8 in respect of any
losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to herein, then each party that would have been
an indemnifying party hereunder shall, in lieu of indemnifying such
Indemnitee, contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) in such proportion as is
appropriate to reflect the relative fault of such indemnifying party, on
the one hand, and such Indemnitee, on the other hand, in connection with
the statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof).
The relative fault of the indemnifying party and the Indemnitee shall be
determined by reference to, among other things, whether the Violation
relates to information supplied by such indemnifying party or such
Indemnitee and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such Violation. The
parties agree that it would not be just and equitable if contribution
pursuant to this Section 2.8(e) were determined by pro rata allocation or
by any other method of allocation which does not take account of the
equitable considerations referred to in the preceding sentence. The
amount paid or payable by a contributing party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this Section 2.8(e) shall include any legal
or other expenses reasonably incurred by such Indemnitee in connection
with investigating or defending any such action or claim. No Person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. The liability
of any Holder of Registrable Securities in respect of any contribution
obligation of such Holder (after deduction of all underwriters’ discounts
and commissions paid by such Holder in connection with the registration
in question) arising under this Section 2.8(e) shall not in any event
exceed an amount equal to the net proceeds to such Holder from the
disposition of the Common Stock Registrable Securities disposed of by
such Holder pursuant to such registration, less the aggregate purchase
price of the Holder’s Common Stock Registrable Securities.
Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement
entered into in connection with an underwritten public offering are in
conflict with the foregoing provisions, the provisions of the
underwriting agreement will control with respect to the rights and obligations of
each of the parties to the underwriting agreement.

	 	2.9.	 	Reports Under Securities Exchange Act of 1934.

     (a) With a view to making available to the Holders the benefits of
Rule 144 promulgated under the 1933 Act (“Rule 144”) and any other
rule or

 

 

regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without registration, the
Company agrees to:

     (i) use commercially reasonable efforts to make and keep
public information available, as those terms are understood and
defined in Rule 144, at all times so long as the Company remains
subject to the periodic reporting requirements under Section 13 or
15(d) of the 1934 Act; and

     (ii) use commercially reasonable efforts to file with the SEC
in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act.

     2.10. Lock-up Agreements. If requested by the Company and the
managing underwriter, each Holder, if registering any Common Stock Registrable
Securities or any other securities of the Company pursuant to a registration
statement that includes the Company’s public offering of the Company’s
securities for the Company’s account, agrees to enter into lock-up agreements
pursuant to which such Holder will not, during the seven (7) days prior to, and
for a period of no longer than one hundred eighty days (180) following, the
effective date of such registration statement, offer, sell or otherwise dispose
of any securities of the Company (except Common Stock Registrable Securities
sold pursuant to such registration statement) without the prior consent of the
Company and the underwriter, provided that the executive officers and directors
of the Company enter into such lock-up agreements for the same period and on
the same terms. In addition, each such Holder agrees to execute an agreement,
in the managing underwriter’s standard form, reflecting the foregoing at the
time of the underwritten offering. The provisions of this Section 2.10 shall
be binding upon any transferee or assignee of any Common Stock Registrable
Securities, whether or not such persons are entitled to registration rights
pursuant to Section 2.11. The obligation of the Holders under this Section
2.10 shall terminate on the Expiration Date.

     2.11. Assignment of Registration Rights. The rights to cause the
Company to register Common Stock Registrable Securities pursuant to this
Section 2 may be assigned by any Holder without limitation to an affiliate (as
such term is defined in the 1934 Act); provided, that such affiliate is not an operating company
that is a direct competitor of the Company. In addition, the rights to cause
the Company to register Common Stock Registrable Securities pursuant to this
Section 2 may be assigned by a Holder to a third party transferee who acquires
such Common Stock Registrable Securities, and by such transferee to a
subsequent permitted transferee; provided, that with respect to any such
transfer, either the transferor is a Significant Stockholder immediately prior
to and subsequent to such transfer and the transferee would hold at least five
percent (5%) of the Company’s outstanding Common Stock immediately after such
transfer (on an as

 

 

converted basis), or, in the event the transferor is not a
Significant Stockholder, such transferor transfers in a single transaction to
one party no less than all of the shares subject to such rights held by the
transferor; provided, however, that such transfer does not
constitute a distribution within the meaning of the 1933 Act and is otherwise
effected in accordance with all applicable securities laws. Any transferee to
which rights under this Agreement are transferred, including an affiliate of a
Holder, shall: (i) as a condition to such transfer, deliver to the Company a
written instrument by which such transferee agrees to be bound by the
obligations imposed upon Holders under this Agreement to the same extent as if
such transferee were a Holder under this Agreement; and (ii) be deemed to be a
Holder hereunder. For purposes of this Section 2.11, Significant Stockholder
shall mean any stockholder of the Company holding at least ten percent (10%) of
the Company’s outstanding capital stock (on an as-converted basis) as of the
date the Company is notified of any proposed transfer of securities by such
stockholder.

     2.13. Delay of Registration. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any registration
as a result of any controversy that might arise with respect to the
interpretation or implementation of this Section 2.

     3. Termination. The right of any Holder to request registration or
inclusion in any registration pursuant to this Agreement shall terminate on the
Expiration Date.

     4. Specific Performance. The parties recognize that their
respective rights under this Agreement are unique, and, accordingly, each party
shall, in addition to such other remedies as may be available to it at law or
in equity, have the right to enforce its rights hereunder by actions for
injunctive relief and specific performance to the extent permitted by law.
This Agreement is not intended to limit or abridge any rights of either party
which may exist apart from this Agreement.

     5. Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if in writing and delivered in
Person, transmitted by facsimile transmission (fax) or sent by registered or
certified mail (return receipt requested) or recognized overnight delivery service, postage pre-paid,
addressed (a) if to a Holder to such address as such holder shall have
furnished the Company in writing, or, until any such Holder so furnishes an
address to the Company, then to and at the address of the last Holder of such
securities who has so furnished an address to the Company or (b) if to the
Company, to 509 Commerce Street, East Wing, Franklin Lakes, New Jersey, 07417,
to the attention of the Corporate Secretary, or to such other address has such
party may notify to the other parties in writing. A notice or communication
will be effective (i) if delivered in Person or by overnight courier, on the
business day it is delivered, (ii) if transmitted by telecopier, on the
business day of actual confirmed receipt by the addressee thereof, and (iii) if
sent by registered or certified mail, three (3) business days after dispatch.

 

 

     6. Binding Effect; Assignment. This Agreement shall be binding
upon, and inure to the benefit of, the parties and their respective personal
representatives, successors and permitted assigns; provided,
however, that the Company shall not have the right to assign its rights
and obligations hereunder, or any interest herein, without the prior written
consent of the holders of a majority of the Common Stock Registrable Securities
then outstanding.

     7. Course of Dealing; Amendments, Waivers and Consents. No course
of dealing between the parties shall operate as a waiver of any party’s rights
under this Agreement. Each party acknowledges that if any party, without being
required to do so by this Agreement, gives any notice or information to, or
obtains any consent from, the other party, such party shall not by implication
have amended, waived or modified any provision of this Agreement, or created
any duty to give any such notice or information or to obtain any such consent
on any future occasion. No delay or omission on the part of any party in
exercising any right under this Agreement shall operate as a waiver of such
right or any other right hereunder or thereunder. A waiver on any one occasion
shall not be construed as a bar to or waiver of any right or remedy on any
future occasion. No amendment, waiver or consent with respect to this
Agreement shall be binding unless it is in writing and signed by each of the
Company and the holders of a majority of the Common Stock Registrable
Securities then outstanding, provided, however, that the Ninety
Day Withdrawal Provision may be amended and shall be binding upon all the
parties to this Agreement if agreed to in writing by each of the Company and
the holders of at least thirty percent (30%) of the Common Stock Registrable
Securities then outstanding.

     8.
Miscellaneous. If any provision of this Agreement shall be found by
any court of competent jurisdiction to be invalid or unenforceable, the parties
hereby waive such provision to the extent that it is found to be invalid or
unenforceable. Such provision shall, to the maximum extent allowable by law,
be modified by such court so that it becomes enforceable, and, as modified, shall be enforced as any other
provision hereof, all the other provisions hereof continuing in full force and
effect. The headings contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation hereof.
This Agreement constitutes the entire understanding of the parties with respect
to the subject matter hereof and supersedes any and all prior understandings
and agreements, whether written or oral, with respect to such subject matter.
This Agreement may be executed in counterparts, which together shall constitute
one and the same instrument. This Agreement shall be governed by and construed
in accordance with the laws (other than the conflict of laws rules) of the
State of Delaware.

 

 

[Signature pages follow]

 

 

SIGNATURE PAGE FOR REGEN BIOLOGICS

COMMON STOCK REGISTRATION RIGHTS AGREEMENT

     IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed by their respective authorized persons as
of the date first indicated above.

	 	 	 	 	 
	 	REGEN BIOLOGICS, INC.

 	 
	 	By:  	/s/ Gerald E. Bisbee, Jr. Ph.D.
 	 
	 	 	Name:  	Gerald E. Bisbee, Jr., Ph.D. 	 
	 	 	Title:  	President and Chief Executive
Officer 	 

	 	 	 
	

	 	STOCKHOLDER:
	 
	 	 
	

	 	If Individual:
	 
	 	 
	

	 	Print Name:
____________________________________
	 
	 	 
	

	 	Signature:
_____________________________________
	 
	 	 
	

	 	If Corporation, Partnership, Limited

Liability

Company or Other Entity:
	 
	 	 
	

	 	Print Name of Entity:
______________________________
	 
	 	 
	

	 	Signature: By:
___________________________________

 

 

SCHEDULE 1 TO THE

COMMON STOCK

REGISTRATION RIGHTS AGREEMENT

FOR REGEN BIOLOGICS

	 	 	 
	 	 	Number of Shares	 	 	 
	Name
	 	Common Stock
	 	 	Dollar Amount Purchased

 

 

EXHIBIT A

EXERCISE OF REGISTRATION RIGHTS

     The undersigned hereby exercises the right to registration pursuant to
Section 2.2(b) of the Agreement this                    day of April, 2004.

     The undersigned has not, within the past three (3) years, held any
position, office, or had any other material relationship with the Company or
any of its predecessors or affiliates.

	 	 	True                     Not True                    
	 
	 	 	If not true, please state the
nature of such
 relationship:                                                    

                                                  The following persons or entities have voting/investment control of the

Registrable Securities being
exercised:_____________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________.

AGREED TO AND ACKNOWLEDGED BY:

Print Name of
signatory:_____________________________________

	 
	By:_________________________________________

	Print
Name:_____________________________________

	Print Title:____________________________

Registrable Securities Held:_________________________________

     Registrable Securities Being Exercised:_________________________________

 

 

EXHIBIT B

WAIVER OF REGISTRATION RIGHTS

     The undersigned hereby waives the right to incidental registration
pursuant to Section 2.2(b) the Agreement this                    day of April, 2004.

AGREED TO AND ACKNOWLEDGED BY:

	 	 
	Print Name of signatory:_________________________________

	 
	 	By:_________________________________

	 	Print Name:_________________________________

	 	Print Title:_________________________________

Registrable Securities Held:
__________________________

	 
	Registrable Securities Being Waived:_________________________________exv10w12

 

EXHIBIT 10.12

REGEN BIOLOGICS, INC.

COMMON STOCK

PURCHASE AGREEMENT

Dated as of April 19, 2004

 

 

REGEN BIOLOGICS, INC.

COMMON STOCK PURCHASE AGREEMENT

     This Agreement, dated as of April 19, 2004 is entered into by and among
ReGen Biologics, Inc., a Delaware corporation (the “Company”), and the
individuals and entities listed on Exhibit A hereto (each a
“Purchaser” and collectively, the “Purchasers”).

     In consideration of the mutual promises and covenants contained in this
Agreement, the parties agree as follows:

     1. Authorization and Sale of Shares.

          1.1 Authorization. The Company has, or before the Closing (as
defined in Section 2) will have, duly authorized the sale and issuance,
pursuant to the terms of this Agreement, of up to 17,650,000 million shares of
its Common Stock, $0.01 par value per share (the “ Common Stock”),
having the rights, restrictions, privileges and preferences set forth in the
Certificate of Incorporation, as amended and restated to date attached hereto
as Exhibit A (the “Certificate of Incorporation”).

          1.2 Sale of Shares. Subject to the terms and conditions of this
Agreement, at the Closing the Company will sell and issue to each of the
Purchasers, and each of the Purchasers will purchase from the Company, (i) the
number of shares of Common Stock set forth opposite such Purchaser’s name on
Exhibit B for the purchase price of $0.85 per share (the “Purchase
Price”. The shares of Common Stock sold under this Agreement are referred
to as the “Shares.” The Company’s agreement with each of the Purchasers
is a separate agreement, and the sale of Shares to each of the Purchasers is a
separate sale.

     2. The Closing. The closing (the “Closing”) of the sale and
purchase of the Shares under this Agreement shall take place at the offices of
Shaw Pittman LLP, 1650 Tysons Blvd., McLean, Virginia, at such time, date and
place and in such manner, including via facsimile or electronic delivery, as
are mutually agreeable to the Company and the Purchasers, but in no event later
than April 30, 2004. At the Closing, the Company shall deliver to each of the
Purchasers a certificate for the number of Shares being purchased at the
Closing by such Purchaser, registered in the name of such Purchaser, against
payment to the Company of the Purchase Price, by wire transfer or other method
acceptable to the Company. The date of the Closing is hereinafter referred to
as the “Closing Date”.

     3. Representations, Warranties and Covenants of the Company.
Except as and to the extent set forth in the Disclosure Schedules delivered to
the Purchasers concurrently herewith, the Company represents and warrants as
follows:

 

 

          3.1 Organization and Good Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full corporate power and corporate authority to carry
on its business as it is now being conducted or is proposed to be conducted,
and to own the properties and assets that it now owns. The Company is duly
qualified and authorized to do business, and is in good standing as a foreign
corporation, in each jurisdiction where the nature of its activities and of its
properties makes such qualification necessary and where a failure to so qualify
would have a material adverse effect on the Company’s business or properties.
Copies of the Company’s Certificate of Incorporation, and its bylaws, as
amended and restated to date (the “Bylaws”), heretofore delivered to the
Purchasers, are complete and correct copies of such instruments as presently in
effect. The Company has no subsidiaries other than those listed in Section 3.6
and does not otherwise own or control any equity interest in any corporation or
other business entity.

          3.2 Power and Authority; Enforceability.

               (a) The Company has full corporate power and corporate authority to enter
into this Agreement to issue the Shares hereunder and to carry out the
transactions contemplated hereby. The Company and its stockholders have, or by
the Closing will have, taken all action required by law, its Certificate of
Incorporation or its Bylaws to authorize the execution and delivery of this
Agreement, the issuance of the Shares pursuant to the terms hereof, and the
consummation of the transactions contemplated hereby. This Agreement and the
Registration Rights Agreement, as defined in Section 5.4, have been duly
executed and delivered by the Company and, assuming the valid authorization,
execution and delivery of this Agreement by the Purchasers, are valid and
binding agreements of the Company, enforceable in accordance with its terms,
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors, as well as judicial principles respecting election of
remedies or limiting the availability of specific performance, injunctive
relief and other equitable remedies.

               (b) The Shares, when issued in compliance with the provisions of this
Agreement, (i) will be validly issued, fully paid and nonassessable, and (ii)
will be free of any liens or encumbrances, other than any liens or encumbrances
created by or imposed upon the holders thereof through no action of the
Company; provided, however, that the Shares will be subject to
restrictions on transfer under state and/or federal securities laws. There are
no rights of first refusal held by any stockholders of the Company with respect
to the issuance of the Shares. The Shares are not subject to any preemptive
rights.

          3.3 No Conflicts or Violation. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby,
will violate any provision of the Certificate of Incorporation or the Bylaws,
or violate or be in conflict with, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of or accelerate the performance required by, or
cause

2

 

the acceleration of the maturity of any debt or obligation pursuant to, or
result in the creation or imposition of any security interest, lien or other
encumbrance upon any property or assets of the Company under, any agreement or
commitment to which the Company is a party or by which the Company is bound, or
to which the property of the Company is subject, which would materially
adversely affect the financial condition of the Company, or, to the best
knowledge of the Company, violate any statute or law or any judgment, decree,
order, regulation or rule of any court or governmental authority.

          3.4 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for the compliance with notice filing
and other requirements under federal and applicable state securities laws,
which compliance will have occurred within the appropriate time periods
therefor.

          3.5 Capitalization. At the Closing, the authorized capital stock
of the Company will consist of 130,000,000 shares of Common Stock of which
29,537,191 shares are outstanding and 60,399,629 are reserved for issuance but
are unissued, and 60,000,000 shares of preferred stock, $0.01 par value per
share (the “Preferred Stock”), of which 15,309,822 shares have been
designated as the Series A Convertible Preferred Stock, $0.01 par value per
share (the “Series A Stock”), of which 15,136,876 shares are
outstanding, and of which 30,000,000 shares have been designated as the Series
C Convertible Preferred Stock, $0.01 par value per share (the “Series C
Stock”), of which 22,246,153 shares are outstanding. All currently issued
and outstanding shares have been issued in compliance with applicable state and
federal securities laws. As of the Closing, the Company has reserved for
issuance, pursuant to its currently active Stock Option Plans, 8,450,000 shares
of Common Stock and has reserved for issuance pursuant to its currently
inactive Stock Option Plans 7,948,618 shares of Common Stock. As of the
Closing, there are outstanding options and warrants to purchase 15,721,752 and
4,635,689 shares of Common Stock, respectively. Except as contemplated herein,
or as set forth on Section 3.5 of the Disclosure Schedule, (i) there are no
commitments as of the date hereof pursuant to which the Company is or may
become obligated to issue any of its capital stock, (ii) there are no
preemptive or similar rights to purchase or otherwise acquire from the Company
any shares of capital stock pursuant to any provision of law, the Certificate
of Incorporation or Bylaws of the Company, or any agreement to which the
Company is a party or otherwise, and (iii) there is no agreement, restriction
or encumbrance with respect to the sale or voting of any outstanding shares of
the Company’s capital stock. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby will
result in any antidilution adjustment for the holders of the Company’s capital
stock or for the holder of any options or warrants to acquire shares of the
Company’s capital stock.

3

 

          3.6 Subsidiaries. The Company is the sole holder of the issued and
outstanding shares of capital stock of RBio, Inc. and MetaContent, Inc. (each a
“Subsidiary” and collectively, the
“Subsidiaries”), and the Company
holds of record and beneficially owns all of the capital stock of each
Subsidiary free and clear of any hypothecation, assignment, deposit
arrangement, Lien, preference, priority or other security agreement, warrant,
attachment, right of first refusal, preemptive right, conversion, put, call or
other restriction on transfer (other than restrictions imposed by federal and
state securities laws), or preferential arrangement of any kind or nature
whatsoever. There are no proxies, voting rights, stockholders agreements or
other agreements or understandings with respect to the voting or transfer of
the capital stock of the Subsidiaries. There are no commitments pursuant to
which any Subsidiary is or may become obligated to issue any of its capital
stock.

          3.7 No Undisclosed Liabilities. Except as set forth in Schedule
3.7 of the Disclosure Schedule, neither the Company nor any of its Subsidiaries
has any material liabilities or obligations of any nature (whether absolute,
accrued, contingent or otherwise) of the type that would be required to be set
forth on financial statements in accordance with GAAP, which are not fully
reflected on the financial statements which are a part of the Company’s annual
report on Form 10-K for the year ended December 31, 2003, filed with the
commission on March 29, 2004 (collectively, the “Financial Statements”), and
there are no undisclosed loss contingencies (as such term is used in Statement
of Financial Accounting Standards No. 5 (“Statement No. 5”) issued by
the Financial Accounting Standards Board in March, 1975) which are not
adequately provided for in the Financial Statements as required by Statement
No. 5.

          3.8 Absence of Changes. Except as set forth in Section 3.8
of the Disclosure Schedule, since December 31, 2003, there has not been (a) any
material adverse change in the financial condition, results of operations,
assets, liabilities or business of the Company or any Subsidiary, (b) any
material increase in the liabilities or obligations of the Company or any
Subsidiary of any nature whatsoever (contingent or otherwise), (c) any asset or
property of the Company or any Subsidiary made subject to a lien of any kind,
(d) any waiver of any valuable rights of the Company, or the cancellation of
any debts or claims held by the Company or any Subsidiary, (e) any payment of
dividends on, or other distributions with respect to, or any direct or indirect
redemption or acquisition of, any shares of the capital stock of the Company or
any Subsidiary, or any agreement or commitment therefor, (f) any issuance of
any stock, bonds or other securities of the Company or any Subsidiary other
than pursuant to or in connection with transactions described herein or
contemplated by this Agreement, (g) any mortgage, pledge, sale, assignment or
transfer of any tangible or intangible assets of the Company or any Subsidiary,
(h) any loan by the Company or any Subsidiary to any officer, director,
employee or stockholder of the Company or any Subsidiary, or any agreement or
commitment therefor, (i) any damage, destruction or loss (whether or not
covered by insurance)
adversely affecting the assets, property or business of the Company or any
Subsidiary, (j) any extraordinary increase in the aggregate amount of salaries
or other compensation paid or payable to employees or agents of the

4

 

Company or any Subsidiary, (k) any change in the accounting methods or
practices followed by the Company or any Subsidiary, (l) any capital
expenditure in excess of US $75,000, or (m) any commitments with respect to any
of the foregoing.

          3.9 Encumbrances. Except as set forth in Section 3.9 of the
Disclosure Schedule, the Company or its Subsidiaries own outright all the
property and assets, real, personal or mixed, tangible or intangible, reflected
in the Financial Statements, or not so reflected because not required to be
reflected but which are used or useful in the business of the Company or its
Subsidiaries, or acquired by the Company or any Subsidiary since December 31,
2003 (in each case other than assets disposed of in the ordinary course of
business since December 31, 2003), subject to no mortgages, liens, security
interests, pledges, charges or other encumbrances of any kind.

          3.10 Litigation. There is no action, suit, customer claim,
proceeding or investigation at law or in equity, or by or before any
governmental instrumentality or other agency, now pending or threatened against
or affecting the Company or any Subsidiary nor, to the best knowledge of the
Company, does there exist any basis for any such pending or threatened action,
suit, customer claim, proceeding or investigation. Neither the Company nor any
of its Subsidiaries is a party to or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or governmental agency or
instrumentality.

          3.11 No Defaults. As of the date hereof, neither the Company nor
any of its Subsidiaries is in default (a) under its Certificate of
Incorporation as currently in effect or Bylaws, (b) under any indenture,
mortgage, lease, purchase or sales order or any other contract, agreement or
instrument to which the Company or any Subsidiary is a party or by which it is
bound, or any order, writ, injunction, judgment or decree of any court or
governmental agency or instrumentality. There exists no condition, event or
act which constitutes, or which after notice or lapse of time or both would
constitute, a default under any of the foregoing.

          3.12 Compliance with Laws. To the best of its knowledge, the
Company and each of its Subsidiaries is in compliance with laws, rules,
ordinances, governmental regulations and orders of all governmental authorities
and/or jurisdictions currently applicable to the conduct of its business as
conducted or proposed to be conducted and has all permits, licenses,
certificates and authorizations required for the conduct of such business.

          3.13 Title to Properties and Assets; Liens, Etc. The Company and
each of its Subsidiaries has good and marketable title to its material
properties and assets, and has good title to all its leasehold interests, in
each case subject to no mortgage, pledge, lien, lease, encumbrance or charge,
other than for taxes not yet due or payable or as set forth in the Financial
Statements or the notes thereto or in Section 3.13 of the Disclosure
Schedule.

5

 

          3.14 Copyrights, Patents and Other Intangible Assets.

               (a) Except as set forth in Section 3.14 of the Disclosure Schedule,
neither the Company nor its Subsidiaries is obligated to make any payments by
way of royalties, fees or otherwise to any owner of, licensor of, or other
claimant to, any patent, trademark, proprietary process, trade name, copyright
or other intangible asset, with respect to the use thereof or in connection
with its business as currently conducted or as proposed to be conducted or
otherwise and it has not granted any licenses or manufacturing publication or
production rights with respect to its business as currently conducted or as
proposed to be conducted.

               (b) Except as set forth in Section 3.14 of the Disclosure Schedule,
the Company and each of its Subsidiaries owns or has the right to use, free and
clear of all liens, claims and restrictions, all patents, trademarks,
proprietary processes, service marks, trade names, and copyrights (and licenses
with respect to the foregoing) necessary to its business as now conducted and
as proposed to be conducted. Such rights may be used in the conduct of its
business as now conducted or as proposed to be conducted without, to the best
of the Company’s or applicable Subsidiary’s knowledge, infringing upon or
otherwise acting adversely to the right or claimed right of any person under or
with respect to any of the foregoing.

               (c) Each employee of the Company and its Subsidiaries has signed a
proprietary information agreement, each of which agreements will be in full
force and effect as of the Closing. Neither the Company nor any of its
Subsidiaries, after reasonable investigation, is aware that any of its
employees is or will be in violation thereof, and the Company and each of its
Subsidiaries will use its best efforts to prevent any such violation.

               (d) Neither the Company nor any of its Subsidiaries has received any
communications alleging that the Company or any Subsidiary has violated or, by
conducting its business as proposed, would violate any of the patents,
trademarks, service marks, trade names, copyrights or trade secrets or other
proprietary rights of any other person or entity, nor is the Company or any
Subsidiary aware of any third party violation of any of the Company’s patents,
trademarks, service marks, trade names, copyrights or trade secrets or other
proprietary rights. Except as set forth in Section 3.14 of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries is aware
that any of its employees (or any person whom the Company or any Subsidiary
presently intends to hire) is obligated under any contract (including licenses,
covenants or commitments of any nature) or agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
conflict with his obligation to use such employee’s best efforts to promote the
interests of the Company or any Subsidiary.

               (e) Except as set forth in Section 3.14 of the Disclosure Schedule,
neither the carrying on of the Company’s business or any Subsidiary’s business
by the employees of the Company or any Subsidiary (or persons whom the Company
presently intends

6

 

to hire), nor the conduct of the Company’s or any Subsidiary’s business as
currently conducted or as proposed to be conducted, will, to the Company’s or
any Subsidiary’s knowledge, conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any of such persons is now obligated.
Except as set forth in Section 3.14 of the Disclosure Schedule, neither
the Company nor any of its Subsidiaries believe it is or will be necessary to
utilize any inventions of any of its employees (or persons it currently intends
to hire) made or owned prior to their employment by the Company or any
Subsidiary or that it is or will be necessary to utilize any other assets or
rights of any of its employees (or persons it currently intends to hire) made
or owned prior to their employment with the Company or any Subsidiary in
violation of any limitations or restrictions to which any such person is a
party or to which any of such assets or rights may be subject.

          3.15 Material Agreements. Except as set forth in Section
3.15 of the Disclosure Schedule, neither the Company nor any of its
Subsidiaries is a party to any written or oral contract not made in the
ordinary course of business and, whether or not made in the ordinary course of
business, neither the Company nor any of its Subsidiaries is a party to any
written or oral (a) contract with any labor union; (b) contract for the future
purchase of fixed assets or for the future purchase of materials, supplies or
equipment in excess of US $75,000 per year; (c) contract for the employment of
any officer, individual employee or other person on a full-time basis (other
than an at-will employment contract) or any contract with any person on a
consulting basis; (d) bonus, pension, profit-sharing, retirement, stock
purchase, stock option, hospitalization, medical insurance or similar plan,
contract or understanding in effect with respect to employees or any of them or
the employees of others; (e) agreement or indenture relating to the borrowing
of money or to the mortgaging, pledging or otherwise placing a lien on any
assets of the Company or any of its Subsidiaries; (f) guaranty by the Company
or any of its Subsidiaries of any obligation for borrowed money or otherwise;
(g) lease or agreement under which the Company or any of its Subsidiaries is
lessee of or holds or operates any property, real or personal, owned by any
other party; (h) lease or agreement under which the Company or any of its
Subsidiaries is lessor of or permits any third party to hold or operate any
property, real or personal, owned or controlled by the Company or any of its
Subsidiaries; (i) agreement or other commitment for capital expenditures; (j)
contract, agreement or commitment under which the Company or any of its
Subsidiaries is obligated to pay any brokers fees, finder’s fees or any such
similar fees to any third party; (k) contract, agreement or commitment under
which the Company or any of its Subsidiaries has issued, or may become
obligated to issue any shares of capital stock of the Company or any of its
Subsidiaries , or any warrants, options, convertible securities or other
commitments pursuant to which the Company or any of its Subsidiaries is or may
become obligated to issue any of its securities except as are referred to in
this Agreement; or (1) any other contract, agreement, arrangement or
understanding which is material to the business of the Company or any of its
Subsidiaries or which is material to, and which a prudent investor would need
to review in order to make, an informed investment decision with respect to the
purchase of the Shares hereunder.

7

 

          3.16 Registration Rights; Co-Sale Rights. Except as set forth in
Section 3.16 of the Disclosure Schedule, neither the Company nor any of
its Subsidiaries is under any contractual obligation to register for sale under
the Securities Act of 1933, as amended (the “Act”), any of its presently
outstanding securities or any of its securities which may hereafter be issued.
Assuming the accuracy of the Purchasers’ representations to the Company, no
registration of the Common Stock issued and sold pursuant to this Agreement
will be required. Except as set forth in Section 3.16 of the Disclosure
Schedule, and except as limited by state and Federal law, there are no
obligations, contractual arrangements or other understandings with respect to
the alienability or voting of the Company’s or any of its Subsidiaries’ Common
Stock or Preferred Stock.

          3.17 Brokers or Finders; Other Offers. Except for fees payable to
Harris Nesbitt Gerard, Inc. and Vail Securities Investment, Inc., neither the
Company nor any of its Subsidiaries has incurred, or will incur, directly or
indirectly, as a result of any action taken by the Company or any of its
Subsidiaries, any liability for brokerage or finders’ fees or agents’
commissions or any similar charges in connection with the offering of the
Common Stock.

          3.18 Tax Returns and Payments. The Company and each of its
Subsidiaries have accurately prepared and timely filed all tax returns
(federal, state and local) required to be filed by it. All taxes shown to be
due and payable on said returns, any assessments, fees or charges and all other
taxes due and payable by the Company or any Subsidiary on or before the date
hereof have been paid prior to the Company or any of its Subsidiaries becoming
delinquent. No deficiency assessment or proposed adjustment of the Company’s
or any of it Subsidiaries’ federal, state or local taxes is pending, and
neither the Company nor any of its Subsidiaries has knowledge of any proposed
liability for any tax to be imposed upon it, its properties or assets for which
it does not have an adequate reserve reflected in the Financial Statements. To
the best of the Company’s or any of its Subsidiaries knowledge, none of the
federal or state income tax returns or state franchise tax returns of the
Company or any Subsidiary has ever been audited by federal or state tax
officials, respectively.

          3.19 Insurance. The Company and each of its Subsidiaries maintains
insurance coverage reasonably adequate for the operation of its business
(taking into account the cost and availability of such insurance).

          3.20 Environmental and Safety Laws. To the best of its knowledge,
neither the Company nor any of its Subsidiaries is in violation of any
applicable statute, law or regulation relating to the environment or
occupational health and safety, and to the best of its knowledge, no material
expenditures are or will be required in order to comply with any such existing
statute, law or regulation.

8

 

          3.21 Commission Documents.

               (a) The Company has filed all required reports, schedules, forms,
statements and other documents (including exhibits and all other information
incorporated therein) with the Commission since December 31, 2002 (the “Company
SEC Documents”). As of their respective dates, the Company SEC Documents
complied in all material respects with the requirements of the Act or the
Securities Exchange Act of 1934, as amended and the Regulations (as defined in
Section 4.4), as the case may be, and none of the Company SEC Documents when
filed (unless amended or superseded by a Company Filed SEC Document filed prior
to the date hereof, then on the date of such later filing) contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. Except to the
extent that information contained in a Company SEC Document has been revised or
superseded in a subsequently filed Company SEC Document, none of the Company
SEC Documents contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading.

               (b) The Financial Statements of the Company included in the Company SEC
Documents complied as to form, as of their respective dates of filing with the
Commission, in all material respects with applicable accounting requirements
and the published rules and regulations of the Commission with respect thereto
(the “Accounting Rules”), have been prepared in accordance with GAAP (except,
in the case of unaudited statements, as permitted by Form 10-Q of the
Commission) applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto) and fairly present, in all material
respects, the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal recurring non-material year-end audit
adjustments).

          3.22 Full Disclosure. This Agreement, the representations and
warranties by the Company contained herein, the Disclosure Schedule and the
Exhibits hereto, and all certificates expressly required to be delivered or to
be furnished to the Purchasers pursuant to this Agreement, when read together,
do not contain any untrue statement of material fact or omit to state a
material fact necessary in order to make the statements contained herein or
therein not misleading.

     4. Representations, Warranties and Covenants of the Purchasers.
Each Purchaser severally represents, warrants and agrees as follows:

9

 

          4.1 Information. Each Purchaser represents that it has received and
reviewed all of the Company SEC Documents and has had an opportunity to ask
questions of the principal officers of the Company and to obtain any additional
information necessary to permit an informed evaluation of the benefits and
risks associated with the investment made hereby. Each Purchaser has made its
own independent investigation of the Company and is aware of the Company’s
proposed business and financial condition. The foregoing, however, does not
limit or modify the representations and warranties of the Company in Section 3
herein or the right of the Purchasers to rely thereon.

          4.2 Accredited Investors. Each Purchaser represents that it is an
accredited investor within the meaning of the Act and Regulation D thereunder,
and by reason of its business or financial experience, or the business or
financial experience of its professional advisor, it has the capacity to
protect its own interests in connection with this transaction.

          4.3 Experience. Each Purchaser represents that it has had sufficient
experience in business, financial and investment matters to evaluate the merits
and risks involved in the investment made hereby and further represents that it
is able to bear the economic risk of such investment for an indefinite period
of time or to lose the entire investment made hereby, and has the capacity to
protect its own interests in connection with the transactions contemplated
herein.

          4.4 Investment Intent. Each Purchaser represents that it is acquiring the
Shares for its own account and not with a view to any sale or distribution
thereof within the meaning of the Act, and the rules and regulations of the
Securities and Exchange Commission (the “Commission”) thereunder as amended
from time to time (the “Regulations”), except to the extent permitted by the
Act and the Regulations. Each Purchaser agrees that it will make no sale,
offer to sell or transfer of any Shares in violation of the Act, the
Regulations or any other federal or state securities law, and each Purchaser
understands that certificates representing the same will bear a legend to such
effect.

          4.5 Restriction on Transfer. Each Purchaser understands that none of the
Shares nor the offer and sale thereof, has been registered under the Act or the
securities laws of any state and there is at the date hereof no public market
for such securities. Each Purchaser further understands and agrees that none
of the Shares may be sold, offered for sale or transferred in any manner for an
indefinite period of time unless and until (a) a registration statement with
respect thereto is in effect under the Act and applicable state laws, or (b) it
has been established to the reasonable satisfaction of the Company and its
counsel that the proposed transaction is exempt from registration under the Act
and applicable state laws or that registration under the Act and applicable
state laws is not required.

10

 

          4.6 Binding Effect, etc. Each Purchaser represents that (a) such
Purchaser has full power and authority to purchase such Shares, (b) such
Purchaser’s agreement to purchase the Shares constitutes a valid and binding
agreement enforceable in accordance with its terms, and (c) the purchase of the
Shares as contemplated hereby will not conflict with or otherwise violate any
charter documents or any other obligations of such Purchaser.

     5. Conditions to the Obligations of the Purchasers. The obligation of
each of the Purchasers under Section 1.2 of this Agreement is subject to the
fulfillment, or the waiver by such Purchaser, of each of the following
conditions on or before the Closing:

          5.1 Accuracy of Representations and Warranties. Each representation and
warranty contained in Section 3 shall be true on and as of the Closing Date
with the same effect as though such representation and warranty had been made
on and as of that date.

          5.2 Performance. The Company shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed
or complied with by the Company prior to or at the Closing.

          5.3 Certificates and Documents. The Company shall have delivered to the
Purchasers:

               (a) The Certificate of Incorporation of the Company, as amended and
restated and in effect as of the Closing Date (including Certificates of
Designations), certified by the Secretary of State of the State of Delaware;

               (b) The Bylaws of the Company, as amended and restated and in effect as of
the Closing Date, certified by its Secretary as of the Closing Date; and

               (c) Resolutions of the Board of Directors of the Company, authorizing and
approving all matters in connection with this Agreement and the transactions
contemplated hereby, certified by the Secretary of the Company as of the
Closing Date.

          5.4 Registration Rights Agreement. The Company shall have entered into a
Registration Rights Agreement (the “Registration
Rights Agreement”) with each
Purchaser substantially in the form attached hereto as
Exhibit C.

          5.5 Opinion of Counsel. Purchasers shall have received from Shaw Pittman,
LLP, special counsel to the Company, an opinion dated as of the Closing, in a
form set forth as Exhibit D.

11

 

          5.6 Compliance Certificates. The Company shall have delivered to the
Purchasers a certificate, executed by the President of the Company, dated the
Closing Date, certifying to the fulfillment of the conditions specified in
paragraphs 5.1, 5.2 and 5.3 of this Agreement.

          5.7 Other Matters. All corporate and other proceedings in connection with
the transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to the Purchasers and their counsel, and the Purchasers and
their counsel shall have received all such counterpart originals or certified
or other copies of such documents as they may reasonably request.

     6. Condition to the Obligations of the Company. The obligations of the
Company under Section 1.2 of this Agreement are subject to the fulfillment, or
the waiver by the Company, of the following condition on or before the Closing:

          6.1 Accuracy of Representations and Warranties. The representations and
warranties of the Purchasers contained in Section 4 shall be true on and as of
the Closing Date with the same effect as though such representations and
warranties had been made on and as of that date.

     7. Transfer of Shares.

          7.1 Restricted Shares. “Restricted Shares” means (i) the Shares and (ii)
any other shares of capital stock of the Company issued in respect of such
shares (as a result of stock splits, stock dividends, reclassifications,
recapitalizations, or similar events).

          7.2 Requirements for Transfer.

               (a) Restricted Shares shall not be sold or transferred unless either (i)
they first shall have been registered under the Act, or (ii) the Company first
shall have been furnished with an opinion of legal counsel, reasonably
satisfactory to the Company, to the effect that such sale or transfer is exempt
from the registration requirements of the Act.

               (b) Notwithstanding the foregoing, no registration shall be required for
(i) a transfer by a Purchaser which is a corporation to a wholly owned
subsidiary of such corporation, a transfer by a Purchaser which is a
partnership to a partner of such partnership or a retired partner of such
partnership who retires after the date hereof, or to the estate of any such
partner or retired partner, or a transfer by a Purchaser which is a limited
liability company to (a) a member or officer of such limited liability company,
(b) a retired member who resigns after the date hereof or to the estate of any
such member or (c) a retired member; provided that the transferee in each case
agrees in writing to be subject to the terms of this Section 7 to the same

12

 

extent as if it were the original Purchaser hereunder, or (ii) a transfer
made in accordance with Rule 144 under the Act.

          7.3 Legend. Each certificate representing Restricted Shares shall bear a
legend substantially in the following form:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, ARE SUBJECT TO THE TERMS OF A LOCK-UP
AGREEMENT BETWEEN THE PURCHASERS AND THE COMPANY (THE
“LOCK-UP AGREEMENT”) AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED (i)
EXCEPT IN COMPLIANCE WITH THE TERMS OF THE LOCK-UP
AGREEMENT; AND (ii) UNLESS AND UNTIL SUCH SHARES ARE
REGISTERED UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY IS OBTAINED TO THE EFFECT
THAT SUCH REGISTRATION IS NOT REQUIRED.”

The foregoing legend shall be removed from the certificates representing any
Restricted Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act.

     8. Miscellaneous.

          8.1 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. This Agreement, and the rights and obligations of each
Purchaser hereunder, may be assigned by such Purchaser to any person or entity
to which Shares are transferred by such Purchaser, and such transferee shall be
deemed a “Purchaser” for purposes of this Agreement; provided that the
transferee provides written notice of such assignment to the Company. The
Company may not assign its rights under this Agreement.

          8.2 Confidentiality. Each Purchaser agrees that he, she or it will keep
confidential and will not disclose, divulge or use for any purpose other than
to monitor his, her or its investment in the Company any confidential,
proprietary or secret information which such Purchaser may obtain from the
Company pursuant to financial statements, reports and other materials submitted
by the Company to such Purchaser pursuant to this Agreement or otherwise
(“Confidential Information”), unless such Confidential Information is known, or
until such Confidential Information becomes known, to the public (other than as
a result of a breach of this Section 8.2 by such Purchaser); provided, however,
that a Purchaser may disclose Confidential

13

 

Information (i) to such Purchaser’s attorneys, accountants, consultants
and other professionals to the extent necessary to obtain their services in
connection with monitoring its investment in the Company, (ii) to any
prospective purchaser of any Shares from such Purchaser, provided that such
prospective purchaser agrees in writing to be bound by the provisions of this
Section 8.2, (iii) to any affiliate of such Purchaser or to a partner,
stockholder or subsidiary of such Purchaser, provided that such affiliate
agrees in writing to be bound by the provisions of this Section 8.2, or (iv) as
may otherwise be required by law, provided that the Purchaser takes reasonable
steps to minimize the extent of any such required disclosure. Notwithstanding
any other provisions of this Section 8.2, a Purchaser shall be free to use the
Residuals (as defined below) of any Confidential Information for any purpose,
subject only to any patents or copyrights of the Company in such Confidential
Information. The term “Residuals” shall mean any information in non-tangible
form which is retained in the memory of a Purchaser or any partner, officer,
employee or representative of a Purchaser.

          8.3 Survival of Representations and Warranties. All agreements,
representations and warranties contained herein shall survive the execution and
delivery of this Agreement and the Closing of the transactions contemplated
hereby until one hundred and eighty (180) days following the Closing Date;
provided, however, that the representation and warranties of Section 3.2 of
this Agreement shall survive indefinitely.

          8.4 Brokers. Each Purchaser represents and warrants to the other parties
hereto that he, she or it has not retained a finder or broker in connection
with the transactions contemplated by this Agreement, and the Company and each
of the Purchasers agrees that such party will indemnify and save the other
parties harmless from and against any and all claims, liabilities or
obligations with respect to brokerage or finders’ fees or commissions, or
consulting fees in connection with the transactions contemplated by this
Agreement asserted by any person on the basis of any statement or
representation alleged to have been made by such indemnifying party.

          8.5 Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

          8.6 Specific Performance. In addition to any and all other remedies that
may be available at law in the event of any breach of this Agreement, each
Purchaser shall be entitled to specific performance of the agreements and
obligations of the Company hereunder and to such other injunctive or other
equitable relief as may be granted by a court of competent jurisdiction.

          8.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware (without reference
to the conflicts of law provisions thereof).

14

 

          8.8 Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be deemed delivered (i) two
business days after being sent by registered or certified mail, return receipt
requested, postage prepaid or (ii) one business day after being sent via a
reputable nationwide overnight courier service guaranteeing next business day
delivery, in each case to the intended recipient as set forth below:

If to the Company, at:

509 Commerce Street, East Wing

Franklin Lakes, NJ 07417

Facsimile: (201) 651-5141

Attention: Gerald E. Bisbee, Jr., Ph.D.,

          or at such other address or addresses as may have been furnished in
writing by the Company to the Purchasers;

     If to a Purchaser, at the address set forth on Exhibit B for such
Purchaser, or at such other address or addresses as may have been furnished to
the Company in writing by such Purchaser.

     Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
party for whom it is intended. Any party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other parties notice in the manner set forth in this
Section.

          8.9 Complete Agreement. This Agreement (including its Exhibits and the
Disclosure Schedule delivered in accordance herewith) constitutes the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings relating
to such subject matter.

          8.10 Amendments and Waivers. Except as otherwise expressly set forth in
this Agreement, any term of this Agreement may be amended or terminated and the
observance of any term of this Agreement may be waived (either generally or in
a particular instance and either retroactively or prospectively), with the
written consent of the Company and the holders of at least 50% of the shares of
Common Stock issued pursuant to this Agreement. Notwithstanding the foregoing,
this Agreement may be amended with the consent of the holders of less than all
of the shares of Common Stock issued only in a manner which applies to all such
holders in the same fashion and any amendment, termination or waiver effected
in accordance with this Section 8.10 shall be binding upon each holder of any
Shares even if they do not execute such consent, each future holder of all such
securities and the Company. No waivers of or exceptions to any

15

 

term, condition or provision of this Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.

          8.11 Pronouns. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural,
and vice versa.

          8.12 Counterparts; Facsimile Signatures. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original,
and all of which shall constitute one and the same document. This Agreement
may be executed by facsimile signatures.

          8.13 Section Headings. The section headings are for the convenience of
the parties only and in no way alter, modify, amend, limit, or restrict the
contractual obligations of the parties.

[Signature Page to Follow]

16

 

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

	 	 	 	 	 
	 	 	ReGen Biologics, Inc.
	 
	 	 	 	 
	

	 	By:
	 	/s/ Gerald E. Bisbee, Jr., Ph.D.
	

	 	 	 	
 
	

	 	Name:
	 	Gerald E. Bisbee, Jr., Ph.D.
	

	 	Title:
	 	President, Chief Executive Officer and Chairman

	 	 	 
	

	 	PURCHASERS:
	 
	 	 
	

	 	If Individual:                                                                            
	 
	 	 
	

	 	Print Name:                                                                            
	 
	 	 
	

	 	Signature:                                                                            
	 
	 	 
	

	 	Contact Information:                                                         
	 
	 	 
	

	 	                                                                                                                                                                                                                                                                                                                                         
                                                                                     
                                                                                                       
                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                     
                                                                                                       
                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                     
                     
	 
	 	 
	

	 	Dollar Amount Purchased:                                                         
	 
	 	 
	

	 	If Corporation, Partnership, Limited Liability

Company or Other Entity:
	 
	 	 
	

	 	Print Name of Entity:                                                         
	 
	 	 
	

	 	Signature By:                                                                            
	 
	 	 
	

	 	Contact Information:                                                         
	 
	 	 
	

	 	                                                                                                                                                                                                                                                                                                                                         
                                                                                     
                                                                                                       
                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                     
                                                                                                       
                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                     
                     
	 
	 	 
	

	 	Dollar Amount Purchased:                                                         

 

 

EXHIBIT A

Certificate of Incorporation

 

 

EXHIBIT B

Purchasers

	 	 	 	 	 	 	 
	 	 	 	 	Number of Shares	 	 
	 	 	 	 	of	 	 
	Name
	 	Address
	 	Common Stock
	 	Dollar Amount Purchased

	 
	 	 	 	 	 	 

 

 

EXHIBIT C

Registration Rights Agreement

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