Document:

Exhibit 10.1

 

 

 

 

 

 

BUCKEYE GP HOLDINGS L.P.

 

 

 

CONTRIBUTION, CONVEYANCE AND
ASSUMPTION AGREEMENT

 

 

 

 

 

 

 

 

CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

This Contribution,
Conveyance and Assumption Agreement, dated as of ______________, 2006, is entered into by and among THE LIMITED
PARTNERS OF MAINLINE L.P., a Delaware limited partnership (“MainLine”)
listed on Schedule A hereto (such limited partners, the “Initial
Limited Partners”), MAINLINE, BUCKEYE GP LLC, a Delaware limited liability
company (“Buckeye GP”), BUCKEYE GP HOLDINGS L.P., a Delaware limited
partnership (the “Partnership”), 
MAINLINE MANAGEMENT LLC, a Delaware limited liability company (the “General
Partner”), and MAINLINE GP, INC., a Delaware corporation (“MainLine GP”).
The above-named entities are sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties.” 
Capitalized terms used herein will have the meanings assigned to such
terms in Section 1.1.

RECITALS:

WHEREAS, the holders of Class A units in MainLine,
including the General Partner, have formed the Partnership pursuant to the
Delaware Revised Uniform Limited Partnership Act (the “Delaware
LP Act”) for the purpose of engaging in any business activity that
is approved by and that lawfully may be conducted by a limited partnership
organized pursuant to the Delaware LP Act, and the General Partner has formed
MainLine GP as a corporation pursuant to the Delaware General Corporation Law
(the “DGCL”) for the purpose of engaging in any business activity that is
approved by and that lawfully may be conducted by a corporation organized
pursuant to the DGCL;

WHEREAS, in order to accomplish the objectives and purposes in
the preceding recital, each of the following actions have been taken prior to
the date hereof:

1.             The General Partner
and the other holders of Class A units in MainLine formed the Partnership under
the terms of the Delaware LP Act and the General Partner agreed to contribute
$0.10 to the Partnership in
exchange for a 0.01% limited partner interest in the Partnership and the
holders of Class A units in MainLine agreed to contribute $999.90 to the
Partnership in exchange for a 99.99% limited partner interest in the
Partnership.

2.             The General Partner
formed MainLine GP as a corporation under the 
DGCL and contributed $1,000 to MainLine GP in exchange for all of the
stock of MainLine GP.

WHEREAS, concurrently with the consummation of the
transactions contemplated hereby, each of the following will occur:

1.             The General Partner
will convey 1,622 Class A units in MainLine, representing a 0.001% general
partner interest, to MainLine GP as a capital contribution.

2.             The MainLine
limited partnership agreement will be amended to convert the General Partner’s
remaining general partner interest in MainLine, represented by 12,973 Class A
units in MainLine, to a limited partner interest.

 

 

3.             The General Partner
will convey its stock interest in MainLine GP and its limited partner interest
in MainLine to the Partnership in exchange for a non-economic general partner
interest in the Partnership and 1,278 Common Units representing limited partner
interests in the Partnership (“Common Units”).

4.             The Initial Limited
Partners will convey their respective interests in MainLine (represented by
145,935,405 Class A units and 16,216,668 Class B units in MainLine) to the
Partnership in exchange for 14,218,592 Common Units and 1,580,000 Management
Units representing limited partner interests in the Partnership (“Management
Units”).

5.             Carlyle/Riverstone
BPL Holdings II, L.P., which is one of the Initial Limited Partners and the
owner of the General Partner, will convey 1,408 Common Units to the General
Partner, as a capital contribution, resulting in the General Partner owning
2,830 Common Units, representing a 0.01% limited partner interest.

6.             The Partnership
will assume all obligations of every nature of MainLine, including the
obligations of MainLine under MainLine’s Credit and Guaranty Agreement, dated
as of December 17, 2004 (the “Debt”) and MainLine will convey beneficial
ownership of all of MainLine’s cash (both restricted and unrestricted), which
MainLine will hold on behalf of the Partnership, to the Partnership.

7.             Buckeye GP will
convey (i) its 1% general partner interest (collectively with the Holdings GP
Interest (as defined below), the “OLP GP Interests”) in each of Buckeye
Pipe Line Company, L.P., Laurel Pipe Line Company, L.P., and Everglades Pipe
Line Company, L.P., and (ii) its approximate 1% general partner interest (the “Holdings
GP Interest”) in Buckeye Pipe Line Holdings, L.P., each a Delaware limited
partnership, to MainLine, in
consideration of the assumption by MainLine of the OLP GP Interest Liabilities
(as defined herein) and the right to receive the MainLine Interests pursuant to
Section 2.8.

8.             MainLine will
distribute its interest in MainLine Sub LLC, a Delaware limited liability
company (“MainLine Sub”), to MainLine GP and the Partnership (in
proportion to their respective interests in MainLine), and MainLine GP will
distribute the interest it receives to the Partnership.

9.             The Partnership
will convey all of the limited partner interests in MainLine and all of the
stock of MainLine GP to Buckeye GP as a capital contribution.

10.           In connection with
the Partnership’s initial public offering (the “Offering”), the public,
through the Underwriters, will contribute cash to the Partnership in exchange
for 14,100,000 Common Units representing a 49.82% limited partner interest in
the Partnership.

11.           The Partnership will
use the proceeds from the Offering to:

(a)                                  pay transaction expenses, estimated at $1.925
million;

 

2

 

(b)                                 retire the Debt;

(c)                                  fund a distribution to the Initial
Limited Partners and the General Partner, as described below; and

(d)                                 fund $500,000 of
working capital.

12.           The Partnership will
distribute any proceeds from the Offering in excess of $_____ (constituting (a)
the amount of the Debt, (b) $500,000 to be retained by the Partnership for
working capital purposes and (c) the transaction expenses) to the Initial
Limited Partners and the General Partner, in accordance with the distribution
provisions of the limited partnership agreement of MainLine, as such provisions
existed prior to the date of this Agreement.

13.           MainLine, Buckeye GP
and MainLine Sub will distribute, on behalf of the Partnership, all of their
cash (including any cash beneficially owned by the Partnership but held in
MainLine’s bank accounts and any proceeds received by such entities from the
repayment of the Debt (including release of any funds deposited in reserve
accounts pursuant to the documents governing the Debt and proceeds from the
sale or termination of interest rate swaps, hedges and other derivative
instruments entered into in connection with the Debt)) to the Initial Limited
Partners and the General Partner, in accordance with the distribution
provisions of the limited partnership agreement of MainLine, as such provisions
existed prior to the date of this Agreement.

The organizational
documents of the Parties will be amended and restated as necessary to reflect
the applicable matters set forth above and as contained in this Agreement.

NOW,
THEREFORE, in
consideration of their mutual undertakings and agreements hereunder, the
Parties undertake and agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1             Terms.  The following defined terms will
have the meanings given below:

“Agreement” means this Contribution, Conveyance
and Assumption Agreement.

“Assets” has the
meaning set forth in Section 2.6.

“Buckeye GP” has the
meaning as set forth in the opening paragraph of this Agreement.

“Code” means Internal Revenue Code of 1986, as
amended.

“Common Units” has the meaning as set forth in
the Recitals of this Agreement.

 

3

 

“Debt” has the meaning as set forth in the
Recitals of this Agreement.

“Delaware LLC Act” has the meaning as set forth
in the Recitals of this Agreement.

“Delaware LP Act” has the meaning as set forth
in the Recitals of this Agreement.

“DGCL” has the meaning as set forth in the
Recitals of this Agreement.

“Effective
Time” means 8:00 a.m. prevailing Eastern Time on the date of closing of the
Offering.

“General Partner” has the meaning as set
forth in the opening paragraph of this Agreement.

“General
Partner’s Interest” has the meaning set forth in Section 2.2.

“Holdings
GP Interest” has the meaning
as set forth in the Recitals of this Agreement.

“Initial Limited Partners” has the meaning as
set forth in the opening paragraph of this Agreement.

“Limited
Partners’ Interest” has the meaning set forth in Section 2.3.

“Management
Units” has the meaning as set forth in the Recitals of this Agreement.

“MainLine” has the meaning as set forth in the
opening paragraph of this Agreement.

“Mainline GP” has the meaning as set forth in
the opening paragraph of this Agreement.

“MainLine GP
Interest” has the meaning set forth in Section 2.1.

“MainLine GP
Liabilities” means all liabilities arising out of or related to the
ownership of the general partner interest in MainLine to the extent arising or
accruing on and after the Effective Time, whether known or unknown, accrued or
contingent, and whether or not reflected on the books and records of MainLine
or its affiliates.

 

“MainLine
Interests” means the General Partner’s Interest and the Limited Partners’
Interest, collectively, comprised of all the limited partner interests in
MainLine and all of the stock of MainLine GP.

“MainLine Interest
Liabilities” means all liabilities
arising out of or related to the ownership of the MainLine Interests to the
extent arising or accruing on and after the Effective Time, whether known or
unknown, accrued or contingent, and whether or not reflected on the books and
records of MainLine or its affiliates.

 

4

 

“MainLine
Sub” has the meaning as set forth in the Recitals of this Agreement.

“MLP
Agreement” means the First Amended and Restated Agreement of Limited
Partnership of the Partnership, as it may be amended, supplemented or restated
from time to time.

“OLP
GP Interests” has the meaning set forth in the Recitals of this Agreement.

“OLP
GP Interest Liabilities” means all liabilities arising out of or related to
the ownership of the OLP GP Interests, whether known or unknown, accrued or
contingent, and whether or not reflected on the books and records of Buckeye GP
or its affiliates, including, without limitation, the liabilities described on Exhibit B
hereto

“Offering” has the meaning as set forth in the
Recitals of this Agreement.

“Partnership” has the meaning as set forth in
the opening paragraph of this Agreement.

“Party” or “Parties” has the meaning as
set forth in the opening paragraph of this Agreement.

“Underwriters” means those the underwriting
syndicate as referenced in the Underwriting Agreement.

“Working Capital Assets” has the meaning as set
forth in the Recitals of this Agreement.

ARTICLE II

CONTRIBUTIONS, ACKNOWLEDGMENTS AND DISTRIBUTIONS

Section
2.1             Contribution of
MainLine GP Interest in MainLine to MainLine GP.  The General Partner hereby grants,
contributes, bargains, conveys, assigns, transfers, sets over and delivers to
MainLine GP, its successors and assigns, for its and their own use forever,
1,622 Class A units in MainLine, representing a 0.001% general partner interest
(the “MainLine GP Interest”). 
MainLine GP hereby accepts such Class A units as a contribution to the
capital of MainLine GP.  The partners in
MainLine hereby agree that the Amended and Restated Agreement of Limited
Partnership of MainLine, dated as of December 15, 2004, is amended to effect
the admission of MainLine GP as general partner of MainLine and the conversion
of the General Partner’s remaining direct interest in MainLine, represented by
12,973 Class A units in MainLine, to a limited partner interest and the change of
the General Partner from the general partner of MainLine to a limited partner.

Section
2.2             Contribution of the
General Partner’s Interest by the General Partner to the Partnership.  The General Partner hereby grants, contributes, bargains, conveys, assigns, transfers, sets
over and delivers to the Partnership, its successors and assigns, for its and
their own use forever (i) all of the issued and outstanding stock of MainLine
GP and (ii) 12,973 Class

 

5

 

A units in MainLine (collectively, the “General Partner’s Interest”)
in exchange for (a) a non-economic general partner interest in the Partnership
and (b) the issuance of 1,278 Common Units, and the Partnership hereby accepts
the issued and outstanding stock of MainLine GP and the 12,973 Class A units in
MainLine as a contribution to the capital of the Partnership.

Section
2.3             Contribution of the
Limited Partners’ Interests by Initial Limited Partners to the Partnership.  The Initial Limited Partners severally hereby
grant, contribute, bargain, convey, assign, transfers, set over and deliver to
the Partnership, its successors and assigns, for its and their own use forever,
their respective interests in MainLine (represented by 145,935,405 Class A
units and 16,216,668 Class B units in MainLine, collectively the “Limited
Partners’ Interest”) in exchange for 12,780,000 Common Units and 1,420,000
Management Units as follows:

(a)           Carlyle/Riverstone
BPL Holdings II, L.P.: contribution of 134,985,405 Class A units in MainLine in
exchange for 11,819,894 Common Units;

(b)           Eric
A. Gustafson: contribution of 400,000 Class A units in MainLine in exchange for
35,026 Common Units and contribution of 2,432,500 Class B units in MainLine in
exchange for 213,000 Management Units;

(c)           Brian
K. Jury: contribution of 500,000 Class A units in MainLine in exchange for 43,782
Common Units and contribution of 1,621,667 Class B units in MainLine in
exchange for 142,000 Management Units;

(d)           Robert.
A. Malecky: contribution of 250,000 Class A units in MainLine in exchange for 21,891
Common Units and contribution of 1,621,667 Class B units in MainLine in
exchange for 142,000 Management Units;

(e)           Stephen
C. Muther: contribution of 1,400,000 Class A units in MainLine in exchange for 122,590
Common Units and contribution of 3,243,334 Class B units in MainLine in
exchange for 284,000 Management Units;

(f)            Vance
E. Powers: contribution of 50,000 Class A units in MainLine in exchange for 4,378
Common Units and contribution of 810,833 Class B units in MainLine in exchange
for 71,000 Management Units;

(g)           William
H. Shea, Jr.: contribution of 4,865,000 Class B units in MainLine in exchange
for 426,000 Management Units;

(h)           Trust
Under Agreement of Alfred W. Martinelli dated December 29, 1992, David J.
Martinelli Trustee F/B/O David Martinelli: contribution of 500,000 Class A
units in MainLine in exchange for 43,782 Common Units;

(i)            Trust
Under Agreement of Alfred W. Martinelli dated December 29, 1992, Susan
Martinelli Shea and William H. Shea, Jr., Trustees F/B/O Susan Martinelli Shea:
contribution of 7,750,000 Class A units in MainLine in exchange for 678,623
Common Units; and

 

6

 

(j)            Robert
B. Wallace: contribution of 100,000 Class A units in MainLine in exchange for 8,756
Common Units and contribution of 1,621,667 Class B units in MainLine in
exchange for 142,000 Management Units;

and the Partnership
hereby accepts such interests in MainLine as a contribution to the capital of
the Partnership.

Section
2.4             Contribution of Common
Units to the General Partner. 
Carlyle/Riverstone BPL Holdings II, L.P. hereby grants, contributes,
bargains, conveys, assigns, transfers, sets over and delivers to the General
Partner, its successors and assigns, for its and their own use forever, 1,552
Common Units, as a capital contribution, and the General Partner hereby accepts
such Common Units as a contribution to the capital of the General Partner.

Section
2.5             Assumption of the
Obligations of the Partnership; Conveyance of Ownership of Cash.  As consideration for the contribution and
transfer by the General Partner of the General Partner’s Interest to the
Partnership and the contribution and transfer of the Limited Partners’ Interest
by the Initial Limited Partners to the Partnership as set forth in Section 2.2
and Section 2.3 above and the conveyance of ownership of MainLine’s cash, as
set forth below, the Partnership hereby irrevocably and unconditionally
undertakes, assumes and agrees to perform, pay and discharge, and hold MainLine
harmless from and indemnify MainLine against, all of MainLine’s liabilities,
including the Debt.  In partial
consideration thereof, MainLine hereby grants, bargains, sells, conveys,
assigns, transfers and delivers beneficial ownership of all cash held by
MainLine, both restricted and unrestricted, to the Partnership and agrees to
hold such cash in its accounts pending distribution thereof pursuant to Section
2.11.

Section
2.6             Assignment of OLP
Interests.  As consideration for the assumption by MainLine
of the OLP GP Interest Liabilities pursuant to Section 3.3 and contribution and
transfer of the MainLine Interests by the Partnership to Buckeye GP as set
forth in Section 2.8, Buckeye GP hereby
grants, bargains, sells, conveys, assigns, transfers and delivers all of the
OLP GP Interests, together with those assets described on Exhibit A hereto
(collectively with the OLP GP Interests, the “Assets”), to MainLine, and its
successors and assigns, and MainLine hereby accepts the Assets at and as of the
date hereof.

Section
2.7             Distribution of
MainLine Sub.  MainLine hereby
assigns, transfers and distributes (a) to MainLine GP, 0.001% of the membership
interest in MainLine Sub and (b) to the Partnership, the remaining 99.999% of
the membership interest in MainLine Sub, in each case as a distribution, and
MainLine GP and the Partnership hereby accept such membership interests.  Effective immediately following the
transactions contemplated by the immediately preceding sentence, MainLine GP
hereby assigns, transfers and distributes to the Partnership its 0.001%
membership interest in MainLine Sub, as a distribution, and the Partnership
hereby accepts such membership interest.

Section
2.8             Assignment of MainLine
and MainLine GP to Buckeye GP.  The
Partnership hereby grants, bargains, sells, conveys, assigns, transfers and
delivers all of the MainLine Interests to Buckeye GP, and its successors and
assigns, and Buckeye GP hereby accepts such MainLine Interests as a
contribution to the capital of Buckeye GP.

 

7

 

Section
2.9             Acknowledgment of
Public Offering by the Partnership and Use of Proceeds.  The Initial Limited Partners and the General
Partner acknowledge that the Partnership is undertaking the Offering and will
use the proceeds as described in the Recitals hereto.

Section
2.10           Distribution to Initial
Limited Partners and General Partner. 
Following the repayment of the Debt, MainLine, Buckeye GP LLC and
MainLine Sub will distribute, on behalf of the Partnership, all of their cash (including any cash beneficially owned by
the Partnership but held in MainLine’s bank accounts and any proceeds received
by MainLine or MainLine Sub from the repayment of the Debt (including release
of any funds deposited in reserve accounts pursuant to the documents governing
the Debt and proceeds from the sale or termination of interest rate swaps,
hedges and other derivative instruments entered into in connection with the
Debt)) to the Initial Limited Partners
and the General Partner, in accordance with the distribution provisions of the
limited partnership agreement of MainLine, as such provisions existed prior to
the date of this Agreement.

Section
2.11           Distribution of Cash
Received From Buckeye Partners, L.P. In Respect of Pre-Closing Quarters,
Offering Closing Bonus.  Promptly
following the receipt by Buckeye GP or MainLine Sub of any funds in respect of
periods prior to the closing of the Offering (including any distribution in
respect of the second quarter of 2006 (the “Second Quarter BPL Distribution”)),
Buckeye GP and MainLine Sub shall distribute such funds to the Partnership and,
subject to the following sentence, the Partnership shall promptly thereafter
distribute such funds to the Initial Limited Partners and the General Partner,
in accordance with the distribution provisions of the limited partnership
agreement of MainLine, as such provisions existed prior to the date of this
Agreement.  The Initial Limited Partners
and the General Partner hereby agree that following the closing of the Offering
the Partnership may use up to $2,000,000 of (a) any funds deposited in reserve accounts pursuant to
the documents governing the Debt or (b)
the Second Quarter BPL Distribution in order to pay cash bonuses to officers of
Buckeye GP and employees of Buckeye Pipe Line Services Company, as determined
by the General Partner.

ARTICLE III

ASSUMPTIONS OF CERTAIN LIABILITIES

Section
3.1             Assumption of MainLine
GP Liabilities by MainLine GP.  In
connection with, and as consideration for, the contribution and transfer by the
General Partner of  the MainLine GP
Interest to MainLine GP as set forth in Section 2.1 above, MainLine GP hereby
assumes and agrees to duly and timely pay, perform and discharge the MainLine
GP Liabilities, to the full extent that the General Partner has been heretofore
or would have been in the future obligated to pay, perform and discharge the
MainLine GP Liabilities were it not for the execution and delivery of this
Agreement; provided, however, that said assumption and agreement to duly and
timely pay, perform and discharge the MainLine GP Liabilities will not (a)
increase the obligation of MainLine GP with respect to the MainLine GP
Liabilities beyond that of the General Partner, (b) waive any valid defense
that was available to the General Partner with respect to the MainLine GP
Liabilities or (c) enlarge any rights or remedies of any third party, if any,
under any of the MainLine GP Liabilities. 
MainLine GP hereby agrees to indemnify, defend and hold harmless the
General Partner, its successors and assigns, from any and all costs,

 

8

 

liabilities and expense, including court costs and attorneys fees,
arising from or connected with the MainLine GP Liabilities hereby assumed.

Section
3.2             Assumption of MainLine
Interest Liabilities by the Partnership. 
In connection with, and as consideration for, the contribution and
transfer by the General Partner of  the
General Partner’s Interest to the Partnership and the contribution and transfer
of the Limited Partners’ Interest by the Initial Limited Partners to the
Partnership, as set forth in Section 2.2 and Section 2.3 above, the Partnership
hereby assumes and agrees to duly and timely pay, perform and discharge the
MainLine Interest Liabilities, to the full extent that the General Partner or
the Initial Limited Partners, as appropriate, have been heretofore or would
have been in the future obligated to pay, perform and discharge the MainLine
Interest Liabilities were it not for the execution and delivery of this
Agreement; provided, however, that said assumption and agreement to duly and
timely pay, perform and discharge the MainLine Interest Liabilities will not
(a) increase the obligation of the Partnership with respect to the MainLine Interest
Liabilities beyond that of the General Partner and the Initial Limited
Partners, (b) waive any valid defense that was available to the General Partner
or the Initial Limited Partners, with respect to the MainLine Interest
Liabilities or (c) enlarge any rights or remedies of any third party, if any,
under any of the MainLine Interest Liabilities.   The Partnership hereby agrees to indemnify,
defend and hold harmless the General Partner and the Initial Limited Partners,
their successors and assigns, from any and all costs, liabilities and expense,
including court costs and attorneys fees, arising from or connected with the
MainLine Interest Liabilities hereby assumed.

Section
3.3             Assumption of OLP GP
Interest Liabilities by MainLine.  In
connection with, and as consideration for, the contribution and transfer by
Buckeye GP of  the Assets to MainLine, as
set forth in Section 2.6 above, MainLine hereby assumes and agrees to duly and
timely pay, perform and discharge the OLP GP Interest Liabilities, to the full
extent that Buckeye GP has been heretofore or would have been in the future
obligated to pay, perform and discharge the OLP GP Interest Liabilities were it
not for the execution and delivery of this Agreement; provided, however, that
said assumption and agreement to duly and timely pay, perform and discharge the
OLP GP Interest Liabilities will not (a) increase the obligation of MainLine
with respect to the OLP GP Interest Liabilities beyond that of Buckeye GP, (b)
waive any valid defense that was available to Buckeye GP with respect to the
OLP GP Interests Liabilities or (c) enlarge any rights or remedies of any third
party, if any, under any of the OLP GP Interest Liabilities.  MainLine hereby agrees to indemnify, defend
and hold harmless Buckeye GP, its successors and assigns, from any and all
costs, liabilities and expense, including court costs and attorneys fees,
arising from or connected with the OLP GP Interests hereby assumed.

ARTICLE IV

ADDITIONAL TRANSACTIONS

Section
4.1             Over-Allotment Option.  The Parties acknowledge that in the event the
Underwriters exercise their Over-Allotment Option, the Partnership will use any
net proceeds therefrom to redeem from the Initial Limited Partners a number of
Common Units and, if applicable pursuant to the provisions set forth below,
Management Units equal to the number of

 

9

 

Common Units issued upon exercise of the Over-Allotment Option, at a
price per Common Unit equal to the net proceeds per Common Unit received by the
Partnership after the Underwriters’ discount but before other expenses.  The redemption of Common Units and Management
Units from the Initial Limited Partners will be as follows:

(a)           a
number of Common Units will be redeemed from Carlyle/Riverstone BPL Holdings
II, L.P. equal to the product obtained by multiplying the number of Common
Units issued upon exercise of the Over-Allotment Option by 83.254%
(13,151,713/15,797,170);

(b)           a
number of Common Units and/or Management Units will be redeemed from each other
Initial Limited Partner, equal to the product obtained by multiplying the
number of Common Units issued upon exercise of the Over-Allotment Option by a
fraction, the numerator of which is the sum of the number of Common Units and
Management Units held by such Initial Limited Partner, and the denominator of
which is 15,797,170;

(c)           Initial
Limited Partners, other than Carlyle/Riverstone BPL Holdings II, L.P., may
assign their obligations to deliver Common Units or Management Units pursuant to
this Section, in whole or in part, to other Initial Limited Partners who agree
to assume such obligations; provided,
however, that no consideration may be paid to the assigning Initial
Limited Partner for such assignment and no additional consideration will be
paid to the assuming Initial Limited Partner, other than the net proceeds per
Common Unit received by the Partnership multiplied by the number of Common
Units and Management Units delivered by the assuming Initial Limited Partner.  To the extent an Initial Limited Partner
cannot obtain agreement from another Initial Limited Partner to assume such
first Initial Limited Partner’s obligations hereunder, such first Initial
Limited Partner will remain obligated to deliver its pro rata portion of Common
Units and/or Management Units determined in accordance with subsection (b)
above; and

(d)           Initial Limited Partners who own Common
Units and Management Units may satisfy their obligation to deliver Common Units
to the Partnership by delivering vested Management Units, or a combination of
Common Units and vested Management Units.

ARTICLE V

FURTHER ASSURANCES

From
time to time after the date hereof, and without any further consideration, the
Parties agree to execute, acknowledge and deliver all such additional deeds,
assignments, bills of sale, conveyances, instruments, notices, releases,
acquittances and other documents, and will do all such other acts and things,
all in accordance with applicable law, as may be necessary or appropriate
(a) more fully to assure that the applicable Parties own all of the
properties, rights, titles, interests, estates, remedies, powers and privileges
granted by this Agreement, or which are intended to be so granted, or
(b) more fully and effectively to vest in the applicable Parties and their
respective successors and assigns beneficial and record title to the interests
contributed and assigned by this Agreement or intended so to be and to more
fully and effectively carry out the purposes and intent of this Agreement.

 

10

 

ARTICLE VI

EFFECTIVE TIME

Notwithstanding
anything contained in this Agreement to the contrary, none of the provisions of
Article II or Article III of this Agreement will be operative or have any
effect until the Effective Time, at which time all the provisions of Article II
and Article III of this Agreement will be effective and operative in accordance
with Article VII, without further action by any Party.

ARTICLE VII

MISCELLANEOUS

Section
7.1             Order of Completion of
Transactions.  The transactions
provided for in Article II of this Agreement will be completed immediately
following the Effective Time in the order set forth in Article II of this
Agreement, provided that the transactions provided for in Section 2.9 through
Section 2.11 will be completed at or promptly following the Effective Time, as
provided therein.  The transactions
provided for in Article III of this Agreement will be completed simultaneously
with the transactions provided for in Article II of this Agreement.

Section
7.2             Costs.  The Partnership will pay all expenses, fees
and costs, including sales, use and similar taxes arising out of the
contributions, conveyances and deliveries to be made hereunder, and will pay
all documentary, filing, recording, transfer, deed and conveyance taxes and
fees required in connection therewith. In addition, the Partnership will be
responsible for all costs, liabilities and expenses (including court costs and
reasonable attorneys’ fees) incurred in connection with the implementation of
any conveyance or delivery pursuant to Article V of this Agreement.

Section
7.3             Headings; References;
Interpretation.  All Article and
Section headings in this Agreement are for convenience only and will not be
deemed to control or affect the meaning or construction of any of the
provisions hereof.  The words “hereof,” “herein”
and “hereunder” and words of similar import, when used in this Agreement, will
refer to this Agreement as a whole, and not to any particular provision of this
Agreement.  All references herein to
Articles and Sections will, unless the context requires a different
construction, be deemed to be references to the Articles and Sections of this
Agreement, respectively.  All personal
pronouns used in this Agreement, whether used in the masculine, feminine or
neuter gender, will include all other genders, and the singular will include
the plural and vice versa.  The terms “include,”
“includes,” “including” or words of like import will be deemed to be followed
by the words “without limitation.”

Section
7.4             Successors and Assigns.  This Agreement will be binding upon and inure
to the benefit of the Parties and their respective successors and assigns.

Section
7.5             No Third Party Rights.  The provisions of this Agreement are intended
to bind the parties signatory hereto as to each other and are not intended to
and do not create rights

 

11

 

in any other person or confer upon any other person any benefits, rights
or remedies, and no person is or is intended to be a third party beneficiary of
any of the provisions of this Agreement.

Counterparts.  This Agreement may be executed in any number
of counterparts, all of which together will constitute one agreement binding on
the Parties.

Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to the
choice of law principles thereof.

Severability.  If any of the provisions of this Agreement
are held by any court of competent jurisdiction to contravene, or to be invalid
under, the laws of any political body having jurisdiction over the subject
matter hereof, such contravention or invalidity will not invalidate the entire
Agreement.  Instead, this Agreement will
be construed as if it did not contain the particular provision or provisions
held to be invalid, and an equitable adjustment will be made and necessary
provision added so as to give effect to the intention of the Parties as
expressed in this Agreement at the time of execution of this Agreement.

Amendment
or Modification.  This Agreement may be
amended or modified from time to time only by the written agreement of all the
Parties.

Integration.  This Agreement and the instruments referenced
herein supersede all previous understandings or agreements among the Parties,
whether oral or written, with respect to its subject matter.  This document and such instruments contain
the entire understanding of the Parties. 
No understanding, representation, promise or agreement, whether oral or
written, is intended to be or will be included in or form part of this
Agreement unless it is contained in a written amendment hereto executed by the
Parties after the date of this Agreement.

Deed;
Bill of Sale; Assignment.  To the extent
required and permitted by applicable law, this Agreement will also constitute a
“deed,” “bill of sale” or “assignment” of the assets and interests referenced
herein.

 

 

[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

12

 

IN WITNESS WHEREOF, this Agreement has been duly executed by the Parties
as of the date first written above.

	
   

  	
  BUCKEYE GP
  HOLDINGS L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  MainLine
  Management LLC,

  
	
   

  	
   

  	
  its General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  BUCKEYE GP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  MAINLINE
  MANAGEMENT LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  MAINLINE GP,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  MAINLINE L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  MainLine
  Management LLC,

  
	
   

  	
   

  	
  its General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

BUCKEYE
GP HOLDINGS L.P.

CONTRIBUTION,
CONVEYANCE AND ASSUMPTION AGREEMENT

SIGNATURE PAGE

 

 

THE
LIMITED PARTNERS OF MAINLINE L.P.

 

CARLYLE/RIVERSTONE BPL HOLDINGS II, L.P.

 

	
  By:

  	
  Carlyle/Riverstone Energy
  Partners II, L.P.

  	
   

  
	
   

  	
  Its General Partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: C/R Energy GP II, LLC

  	
   

  
	
   

  	
  Its General Partner

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Andrew Ward

  
	
   

  	
  Title:

  	
  Authorized person

  
				

 

	
  Trust Under Agreement of Alfred W. Martinelli dated December 29, 1992,
  Susan Martinelli and William Shea, Jr., Trustees F/B/O Susan Martinelli Shea

  	
   

  	
  Trust Under Agreement of Alfred W. Martinelli dated December 29, 1992,
  David J. Martinelli Trustee F/B/O David Martinelli

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Susan Martinelli Shea, Trustee

  	
   

  	
  David J. Martinelli, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  William H. Shea, Jr., Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

 

 

	
   

  	
   

  	
   

  
	
  Stephen C. Muther

  	
   

  	
  Brian K. Jury

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Eric A. Gustafson

  	
   

  	
  Robert B. Wallace

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Robert A. Malecky

  	
   

  	
  Vance E. Powers

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  William H. Shea, Jr.

  	
   

  	
   

  

 

 

 

SCHEDULE
1

Limited
Partners of MainLine

	
  Unitholder

  	
   

  	
  Number of

  Class A Units

  of MainLine

  	
   

  	
  Number of

  Class B Units

  of MainLine

  	
   

  
	
  Carlyle/Riverstone BPL Holdings II, L.P.

  	
   

  	
  134,985,405

  	
   

  	
  —

  	
   

  
	
  Trust Under Agreement of Alfred W. Martinelli dated
  December 29, 1992, Susan Martinelli Shea and William H. Shea, Jr., Trustees
  F/B/O Susan Martinelli Shea

  	
   

  	
  7,750,000

  	
   

  	
   

  	
   

  
	
  William H. Shea, Jr.

  	
   

  	
  —

  	
   

  	
  4,865,000

  	
   

  
	
  Stephen C. Muther

  	
   

  	
  1,400,000

  	
   

  	
  3,243,334

  	
   

  
	
  Brian K. Jury

  	
   

  	
  500,000

  	
   

  	
  1,621,667

  	
   

  
	
  Trust Under Agreement of Alfred W. Martinelli dated
  December 29, 1992, David J. Martinelli, Trustee F/B/O David Martinelli

  	
   

  	
  500,000

  	
   

  	
   

  	
   

  
	
  Eric A. Gustafson

  	
   

  	
  400,000

  	
   

  	
  2,432,500

  	
   

  
	
  Robert B. Wallace

  	
   

  	
  100,000

  	
   

  	
  1,621,667

  	
   

  
	
  Robert. A. Malecky

  	
   

  	
  250,000

  	
   

  	
  1,621,667

  	
   

  
	
  Vance E. Powers

  	
   

  	
  50,000

  	
   

  	
  810,833

  	
   

  

 

 

Exhibit A

ASSETS

(a)           The 1% general partner interest in
Buckeye Pipe Line Company, L.P., together with all right, title and interest of
Buckeye GP in, to and under that certain Amended and Restated Agreement of
Limited Partnership of Buckeye Pipe Line Company, L.P., as amended and restated
as of December 15, 2004;

(b)           The 1% general partner interest in
Laurel Pipe Line Company, L.P., together with all right, title and interest of
Buckeye GP in, to and under that certain Amended and Restated Agreement of
Limited Partnership of Laurel Pipe Line Company, L.P., as amended and restated
as of December 15, 2004;

(c)           The 1% general partner interest in
Everglades Pipe Line Company, L.P., together with all right, title and interest
of Buckeye GP in, to and under that certain Amended and Restated Agreement of
Limited Partnership of Everglades Pipe Line Company, L.P., as amended and
restated as of December 15, 2004;

(d)           The approximate 1% general partner
interest in Buckeye Pipe Line Holdings, L.P., together with all right, title
and interest of Buckeye GP in, to and under that certain Amended and Restated
Agreement of Limited Partnership of Buckeye Pipe Line Holdings, L.P., as
amended and restated as of December 15, 2004;

(e)           All right, title and interest of
Buckeye GP in, to and under the Management Agreement, dated as of December 15,
2004, between Buckeye GP and Buckeye Pipe Line Company, L.P.;

(f)            All right, title and interest of
Buckeye GP in, to and under the Management Agreement, dated as of
December 15, 2004, between Buckeye GP and Laurel Pipe Line Company, L.P.;

(g)           All right, title and interest of
Buckeye GP in, to and under the Management Agreement, dated as of
December 15, 2004, between Buckeye GP and Everglades Pipe Line Company,
L.P.;

(h)           All right, title and interest of
Buckeye GP in, to and under the Management Agreement, dated as of
December 15, 2004, between Buckeye GP and Buckeye Pipe Line Holdings,
L.P.;

(i)            All goodwill of Buckeye GP relating
to the foregoing.

 

 

 

EXHIBIT
B

 

LIABILITIES

(a)           All liabilities and obligations of
Buckeye GP under that certain Amended and Restated Agreement of Limited
Partnership of Buckeye Pipe Line Company, L.P., as amended and restated as of
December 15, 2004, arising after the date hereof;

(b)           All liabilities and obligations of
Buckeye GP under that certain Amended and Restated Agreement of Limited
Partnership of Laurel Pipe Line Company, L.P., as amended and restated as of
December 15, 2004, arising after the date hereof;

(c)           All liabilities and obligations of
Buckeye GP under that certain Amended and Restated Agreement of Limited Partnership
of Everglades Pipe Line Company, L.P., as amended and restated as of
December 15, 2004, arising after the date hereof;

(d)           All liabilities and obligations of
Buckeye GP under that certain Amended and Restated Agreement of Limited
Partnership of Buckeye Pipe Line Holdings, L.P., as amended and restated as of
December 15, 2004, arising after the date hereof;

(e)           All liabilities and obligations of
Buckeye GP under that certain Management Agreement, dated as of
December 15, 2004, between Buckeye GP and Buckeye Pipe Line Company, L.P.,
arising after the date hereof;

(f)            All liabilities and obligations of
Buckeye GP under that certain Management Agreement, dated as of
December 15, 2004, between Buckeye GP and Laurel Pipe Line Company, L.P.,
arising after the date hereof;

(g)           All liabilities and obligations of
Buckeye GP under that certain Management Agreement, dated as of
December 15, 2004, between Buckeye GP and Everglades Pipe Line Company,
L.P., arising after the date hereof;

(h)           All liabilities and obligations of
Buckeye GP under that certain Management Agreement, dated as of
December 15, 2004, between Buckeye GP and Buckeye Pipe Line Holdings,
L.P., arising after the date hereof;

(i)            All liabilities and obligations of
Buckeye GP under that certain Third Amended and Restated Exchange Agreement,
dated as of December 15, 2004, among Buckeye GP, MainLine Sub LLC, Buckeye
Partners, L.P., Buckeye Pipe Line Company, L.P., Laurel Pipe Line Company,
L.P., Everglades Pipe Line Company, L.P., and Buckeye Pipe Line Holdings, L.P.,
arising after the date hereof, to the extent relating to the role of general
partner of the Operating Partnerships (as defined therein).Exhibit 10.32

 

FORM
OF

REGISTRATION
RIGHTS

AGREEMENT

dated

[                  ]

between

[                  ],

(“Holder”)

[                  ]

and

Osiris
Therapeutics, Inc.,

2001 Aliceanna Street,

Baltimore, MD 21231, U.S.A.

(“Company”)

(together, the “Parties”).

PREAMBLE

WHEREAS

A.                                   The Company
proposes to issue a convertible promissory note, substantially in the form
attached as Annex 1 hereto (the “Note”),
wherein the holder of such Note (the “Holder”)
is entitled on or after [                  ]
and upon the closing of a first firm commitment underwritten public
offering of shares of the Company’s common stock (the “Registrable Securities”) in an amount of
not less than US$ 25.0 million (the “IPO”)
to convert the Note in whole or in part into Registrable Securities or to
redeem the Note on or before the final maturity date of the Note for a cash
payment to be made by the Company.

SECTION 1

DEFINITIONS

For
purposes of this Agreement:

(a)                                  The term “Closing Date” means [                  ].

(b)                                 The terms “register”, “registered” and “registration”
refer to a registration effected by preparing and filing a registration
statement or similar document, including a shelf registration statement under
Rule 415 of the Securities Act, or any similar rules that may be adopted by the
SEC, 

 

 

 

or
a timely amendment to any effective registration statement, in compliance with
the Securities Act, and the declaration or ordering by the SEC of effectiveness
of such registration statement, document or amendment.

(c)                                  The term “registration statement” means any
registration statement of the Company which covers any of the Registrable
Securities pursuant to the provisions of this Agreement, and all amendments and
supplements to any such registration statement, including post-effective
amendments, in each case including the prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.

(d)                                 The term “Securities Act” means the US Securities Act
of 1933, as amended.

(e)                                  The term “SEC” means the United States Securities and
Exchange Commission.

SECTION
2

OBLIGATIONS OF THE COMPANY

(1)                                  Immediately
following receipt by the Company of an exercise notice substantially in the
form attached as Annex 2 hereto, in which the Holder elects conversion
(in whole or in part) of the Note into Registrable Securities, the Company
shall, as soon as practicable or earlier at the Company’s discretion, effect
the registration of all Registrable Securities (which term shall, for the
avoidance of doubt, include all shares of the Company’s common stock resulting
from the exercise by Holder of its conversion right) for trading on the
securities exchange on which the Company’s shares of common stock will be
traded following the IPO.  When delivered
to the Holder, the Registrable Securities resulting from the conversion shall
be freely tradable under the Securities Act and applicable state blue-sky laws,
subject only to contractual lock-up, as set out in Section 8 below

(2)                                  Whenever
required under this Agreement to file a registration statement with respect to
the Registrable Securities, the Company shall:

(a)                                  Prepare and
file with the SEC (or other relevant body) a registration statement or a timely
amendment to any effective registration statement for shares of the Company’s common
stock with respect to such Registrable Securities.

(b)                                 Prepare and
file with the SEC (or other relevant body) such amendments and supplements
to  such registration statement and the
prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act (or other
relevant legislation) with respect to the disposition of all securities covered
by such registration statement.

 

 

2

 

(c)                                  Furnish to the
Holder such number of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act (or other
relevant legislation), and such other documents as it may reasonably request in
order to facilitate the disposition of Registrable Securities owned by or
deliverable to it.

(d)                                 Register and
qualify the securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as shall be reasonably
requested by the Holder.

(e)                                  In the event of
any underwritten public offering, enter into and perform its obligations under
an underwriting agreement with terms generally satisfactory to the managing
underwriter of such offer.

(f)                                    Cause all
Registrable Securities registered pursuant thereunder to be listed on each
securities exchange on which similar securities issued by the Company are then
listed.

(g)                                 Provide a
transfer agent and registrar for all Registrable Securities registered pursuant
hereunder and a CUSIP number for all such Registrable Securities not later than
the effective date of such registration.

(h)                                 Afford the
Holder and its representatives the opportunity to make such examination of the
business affairs of the Company and its subsidiaries as the Holder may
reasonably deem necessary to satisfy itself as to the accuracy of the
registration statement (subject to a reasonable confidentiality undertaking on
the part of the Holder and its representatives).

SECTION 3

INFORMATION

It
shall be a condition precedent to the obligations of the Company to take any
action pursuant to this Agreement that the Holder shall furnish to the Company
such information regarding itself and the Registrable Securities held by it as
shall reasonably be required to effect the registration of its Registrable
Securities.

SECTION
4

EXPENSES OF REGISTRATION

All
expenses incurred by the Company in connection with any registration pursuant
to this Agreement (other than underwriter’s Commissions and fees) including
without limitation all registration, filing
and qualification fees, printers’ and accounting fees and fees and disbursements
of counsel for the Company, shall be borne by the Company.

 

3

 

SECTION 5

INDEMNIFICATION

In
the event any Registrable Securities are included in a registration statement
in accordance herewith:

(a)                                  To the extent
permitted by law, the Company will indemnify and hold harmless the Holder, the
officers and directors of the Holder, and each person, if any, who controls the
Holder or underwriter within the meaning of the Securities Act or the 1934 Act
(collectively, the “Indemnified Parties”)
against any losses, claims, damages, or liabilities to which they may become
subject under the Securities Act, the 1934 Act or other United States 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 of the following
statements, omissions or violations (collectively a “Violation”): (i) any 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; (ii) the omission to state
therein a material fact required to be stated therein, or necessary to make the
statements therein not misleading in light of the circumstances under which
they were made, or (iii) any Violation by the Company of the Securities Act,
the 1934 Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the 1934 Act or any state securities law; and the
Company will reimburse each such Indemnified Party for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this Section 5, 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 the Company
(which consent shall not be unreasonably withheld).

(b)                                 Promptly after
receipt by the Company under this Section 5(b) of notice of the commencement of
any action (including any governmental action), the Company will, if a claim in
respect thereof is to be made against the Holder under this Section 5, notify
the Holder in writing of the commencement thereof and the Holder shall have the
right to participate in, and, to the extent the Holder so desires, jointly with
any of its affiliates, to assume the defense thereof with counsel mutually
satisfactory to the Parties.  The failure
to notify the Holder within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve the
Holder of any liability to the Company under this Section 5, but the omission
so to notify the Holder will not relieve it of any liability that it may have
to the Company otherwise than under this Section 5.

 

4

 

SECTION
6

RULE 144 REPORTING

With
a view to making available the benefits of certain rules and regulations of the
SEC that may permit the sale of the Registrable Securities to the public
without registration, the Company agrees to
use its best efforts to:

(a)                                  make and keep
public information regarding the Company available as those terms are
understood and defined in Rule 144 under the Securities Act, at all times;

(b)                                 file with the
SEC in a timely manner all reports and other documents required of the Company
under the Securities Act and the 1934 Act at any time after it has become
subject to such reporting requirements;

(c)                                  so long as the
Holder owns any Registrable Securities, furnish to the Holder forthwith upon
written request a written statement by the Company as to its compliance with the reporting requirements of Rule
144, and of the Securities Act and the 1934 Act, a copy of the most
recent annual or quarterly report of the
Company, and such other reports and documents so filed as the Holder may reasonably request in availing itself of any rule
or regulation of the SEC allowing the Holder to sell any such securities
without registration.

SECTION
7

COMMISSIONS AND EXPENSES

(1)                                  The Company
will pay to the Holder on the Closing Date a commission of 4.5% of the gross
proceeds of the offering of the Offered Securities (the “Fees”).

(2)                                  Prior to
disbursement of the purchase price of the Note to the Company, the Holder may
deduct the Fees from the purchase price from the purchase price of the Note.

SECTION
8

LOCK-UP

(1)                                  In the event of an IPO, Holder agrees to enter into any lock-up
agreement which may be requested by the underwriters of such an IPO, and
all the Registrable Securities shall be subject to such lock-up agreement,
provided that (a) the time period of any lock-up
shall in no event exceed 180 days from the date of the final offer document with respect to the IPO, and (b) the terms of such
lock-up agreement shall be substantially
identical to, and in no event more burdensome on the Holder than, the terms of any other lock-up agreement entered into
by any other holder of Registrable Securities in connection with the
IPO.

 

5

 

(2)                                  At the request of the Holder, the Company shall furnish to the Holder
copies of any and all lock-up agreements entered into by any other
holder of Registrable Securities in
connection with the IPO (subject to a reasonable confidentiality undertaking on
the part of the Holder and its representatives).

SECTION
9

CONFIDENTIALITY

The
Parties shall keep any non-public information, in connection with the
Transaction confidential, unless disclosure is required by applicable law or
regulations or by an administrative or court order.  Non-public information does not include information
which (a) is or becomes generally available to the public, (b) was available to
either Party on a non-confidential basis prior to its disclosure by the other
Party, (c) becomes available on a non-confidential basis from a person who is
not prohibited from disclosing such information, or (d) is transmitted by
either Party after termination of this Agreement.  The passing on of confidential information by
either party to any of its affiliates or professional advisors (provided such
advisors are subject to an equivalent duty of confidentiality) for the purpose
of evaluation, preparation or consummation of the Transaction does not
constitute a breach of the above confidentiality undertaking.

SECTION
10

AMENDMENTS

Amendments
to this Agreement shall only be made in writing. This shall also apply to amendments of this provision.

SECTION
11

SEVERABILITY

Should
any provision of this Agreement be or become invalid either in whole or in
part, the other provisions of this Agreement shall remain in force.  It is understood by the parties hereto that
any invalid provision shall be replaced by a valid provision, which
accomplishes as far as legally possible the economic effects of the invalid
provision.

SECTION 12

PRINCIPAL CONTACTS

All
notices under this Agreement shall be effective only if in writing (including
telegraphic communication) or by telephone confirmed in writing to be delivered
to the contacts as follows:

	
  If to Holder:

  	
   

  	
  [                         ]

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  [                         ]

  
	
   

  	
   

  	
   

  
	
  If
  to Osiris:

  	
   

  	
  Osiris
  Therapeutics, Inc.

  
	
   

  	
   

  	
  2001
  Aliceanna Street

  
	
   

  	
   

  	
  Baltimore, MD 21231-3043, USA

  
	
   

  	
   

  	
  Attn.: Randy Mills

  

 

6

 

	
   

  	
   

  	
  Fax No.+1 410 563 0794

  
	
   

  	
   

  	
  Tel. No.+1 410 522 5005

  
	
   

  	
   

  	
  E-mail:
  rmills@osiristx.com

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  Peter
  Friedli

  
	
   

  	
   

  	
  Freigutstrasse
  5

  
	
   

  	
   

  	
  8002
  Zurich, Switzerland

  
	
   

  	
   

  	
  Fax
  No. +41 1 283 2901

  
	
   

  	
   

  	
  Tel. No. +41 1 283 2900

  
	
   

  	
   

  	
  E-mail: peter.friedli@friedlicorp.ch

  

 

 

SECTION
13

MISCELLANEOUS

(1)                                  This Agreement
constitutes the entire agreement of the Parties and supersedes any previous agreements with regard to the subject
matter hereof.

(2)                                  This Agreement
shall be governed by and construed in accordance with the laws of Switzerland. 
Place of performance for the obligations hereto shall be Zürich, Switzerland.

(3)                                  The exclusive
place of jurisdiction for any action or other legal proceeding arising out of,
or in connection with, this Agreement are, to the extent legally permissible,
the courts in Zürich, Switzerland.

(4)                                  For any legal
disputes or other proceedings before Swiss courts, Holder appoints [_______________] as its authorized agent
for accepting service of process in connection with this Agreement.

(5)                                  For any legal disputes or other proceedings before Swiss Courts, the
Company appoints Mr. Peter Friedli as its authorised agent for accepting
service of process in connection with this Agreement for the benefit of the
Parties and in connection with the Note for
the benefit of the Holder from time to time.

(6)                                  All Annexes hereto form an integral part of this Agreement.

(7)                                  This Agreement
may be executed in any number of counterparts. 
Exchange of counterparts duly
executed by the respective parry shall suffice. 
Each executed copy shall be an
original of one and the same Agreement.

[                  ]

	
  By:_____________________________

  	
  By:____________________________

  
	
   

  	
   

  
	
  Name:

  	
  Name:

  
	
  Title:

  	
  Title

  

 

7

 

	
   

  	
   

  
	
  Osiris Therapeutics, Inc.

  	
   

  
	
   

  	
   

  
	
  By:                                          

  	
  By:____________________________

  
	
  Name:  C. Randal Mills

  	
  Name:

  
	
  Title:  President & CEO

  	
  Title

  

 

 

8

 

ANNEX
1

FORM
OF PROMISSORY NOTE

 

9

 

THIS
CONVERTIBLE PROMISSORY NOTE (THIS “NOTE”) AND THE SECURITIES THAT MAY BE ACQUIRED PURSUANT TO THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THIS NOTE AND
SUCH OTHER SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF A REGISTRATION STATEMENT AND LISTING APPLICATION IN EFFECT WITH RESPECT
TO THIS NOTE OR SUCH OTHER SECURITIES UNDER THE SECURITIES ACT AND ANY OTHER APPLICABLE SECURITIES LAW, OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION AND LISTING ARE NOT REQUIRED PURSUANT TO A VALID EXEMPTION THEREFROM UNDER THE SECURITIES ACT
AND THE APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION.

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE
SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX
LAWS, INCLUDING LIMITATIONS PROVIDED IN SECTIONS
165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE.

CONVERTIBLE
PROMISSORY NOTE 

due November 28, 2008

US
$20,600,000

November 28, 2005

 

FOR VALUE RECEIVED, Osiris Therapeutics, Inc.,
a Delaware corporation (the “Company”), having an address of 2001 Aliceanna
Street, Baltimore, MD 21231, U.S.A., hereby promises to pay to the order of [                  ]
(the “Holder”), at the offices of Holder at [                  ] or such other place as may be designated by
Holder to the Company in writing, the aggregate of (i) twenty million six hundred thousand U.S. Dollars (U.S.$ 20,600,000)
(the “Principal”), together with, and upon and subject to the terms and
conditions hereinafter set forth, (ii) accrued and unpaid interest thereon, and (iii) an additional amount
corresponding to 27% of the Principal (such aggregate the “Final Payment Amount”).  Notwithstanding anything to the contrary, no
payment on the note will be made by mail to an address in the United States or
by wire transfer to an account maintained by the Holder in the United States.

1.                     Payment Terms.  The Company promises to pay to Holder the
Final Payment Amount on November 28, 2008 (the “Maturity
Date”), unless this Note is earlier redeemed by the Company or converted into Common Stock (as hereinafter defined) of the
Company, pursuant to Section 3 or Section 5 hereof, as applicable.  All accrued and unpaid interest shall be due
and payable in accordance with Section 2 hereof.  All payments
hereunder shall be made in lawful money of the United States of America.  Payment shall be credited first to the
accrued and unpaid interest then due and payable and the remainder to Principal.

 

10

 

2.                     Interest.  Interest on the outstanding portion of
Principal of this Note shall accrue at a rate of six per cent. (6%) per annum. 
All computations of interest shall be made on the basis of a 360-day
year for actual days elapsed.  All
accrued interest shall be due and payable on each Payment Date (as hereinafter
defined), the Maturity Date, the IPO
Redemption Date (as hereinafter defined), the Company Redemption Date (as
hereinafter defined) or the IPO Conversion Date (as hereinafter defined), as
the case may be, in each case in accordance with the terms and conditions of this Note. 
“Payment Date” means each of November 28, 2006 and November 28,
2007.  If a Payment Date, the Maturity
Date, the IPO Redemption Date, the Company Redemption Date or the IPO Conversion Date is on a day that is not a
business day, payment of any amounts due and payable on such date shall be effected on the immediately
following business day.

3.                                       Conversion or
Redemption of this Note.

(a)           Conversion or Redemption at Option
of Holder.  Upon the initial closing
by the Company of its first firm commitment underwritten public offering of
shares of the Company’s common stock, par value
U.S.$0.001 per share (or as amended from time to time as envisaged by Section 6
below) (“Common Stock”) of not less than U.S.$25 million (such closing
an “IPO”), this Note may, at the sole option
of Holder, be, in whole or in part, (i) converted into shares of Common Stock,
in accordance with Section 3(a)(i)
hereof, if such IPO takes place on or after 20 December 2006, but prior to the Maturity
Date or (ii) redeemed by the Company for cash in accordance with Section
3(a)(ii) hereof, if such IPO takes place at any time prior to the Maturity
Date.  The date of conversion is referred
to as the “IPO Conversion Date” and the date of such redemption is referred to
as the “IPO Redemption Date”.

(i)            Conversion.  In the event of an IPO and Holder’s election
to convert this Note, in whole or in part, into Common Stock, the number of
shares of Common Stock to which Holder shall be entitled upon such conversion (the “IPO Conversion Shares”)
shall be equal to the result of the following calculation: (i) the
percentage of the Principal in relation to which the Holder elects to convert
this Note into Common Stock multiplied by (ii) the sum of (x) the Principal
multiplied by the IPO Adjustment Factor (as defined below) and (y) the accrued
and unpaid interest on the IPO Conversion Date, such product divided by (iii) the
IPO Price (as defined below).

The “IPO Adjustment Factor”
amounts to

•                                          109% for the
time period until 28 November, 2006;

•                                          115% for the
time period beginning 29 November, 2006 and ending 28 May, 2007;

•                                          118% for the
time period beginning 29 May, 2007 and ending 28 November, 2007;

•                                          124% for the time
period beginning 29 November, 2007 and ending 28 May, 2008;

 

11

 

•                                          127% for the time period beginning 29 May, 2008 and ending 28 November,
2008.

“IPO
Price” shall mean the price per share at which shares of Common Stock are sold
to the public in the IPO.  Upon the election by Holder to convert this
Note, in whole or in part, pursuant to this Section 3(a)(i), the
Company shall immediately take all necessary steps to register the IPO
Conversion Shares under the Securities Act pursuant to the Registration
Rights Agreement dated on or about 28 November
2005 among, inter alia, the
Company and the Holder.

(ii)           Redemption.  In the
event of an IPO and Holder’s election to have this Note redeemed by the
Company, the Company shall effect such redemption by paying, in immediately
available funds, an amount to Holder equal
to the result of the following calculation: (i) the percentage of the Principal
in relation to which the Holder
elects to have this Note redeemed multiplied by (ii) the sum of (x) the Principal multiplied by the IPO Adjustment Factor
and (y) the accrued and unpaid interest on the IPO Redemption Date (the “IPO
Redemption Price”).

(b)           Conversion
or Redemption.  Following the initial filing by the Company
of a registration statement in connection with the IPO and at least 30
days prior to the anticipated effective date of such registration statement, the Company shall provide written notice (the “Company
Notice”) to Holder of the filing of such registration statement.  Holder shall elect, by delivery of a written
notice, substantially in the form attached as Annex 1 (the “Exercise
Notice”), to Company within 15 days of Holder’s receipt of the Company Notice, to convert this Note upon the IPO, in whole or in
part, pursuant to Section 3(a)(i) above, if the IPO takes place on or after 20
December 2006, but prior to the Maturity Date, or to have this Note then redeemed, in whole or in part, pursuant
to Section 3(a)(ii) above, if the IPO takes place at any time prior to
the Maturity Date.  If the Holder elects
to convert this Note in part into Common Stock pursuant to Section 3(a)(i)
above and to have this Note in part redeemed pursuant to Section 3(a)(ii)
above, the Holder shall specify the portion of Principal that shall be
converted into Common Stock and the portion of Principal that shall be
redeemed in the Exercise Notice.  The Holder’s right to elect partial conversion or
redemption of this Note may be exercised in increments of U.S.$100,000. 
In the event Holder fails to respond to the Company Notice in a timely
manner, the Company shall understand such failure to mean that Holder
has elected to redeem this Note in accordance
with Section 3(a)(ii) above. 
Notwithstanding the foregoing, the Company shall not be obligated to
deliver the IPO Conversion Shares issued upon conversion of this Note by the
Holder or pay the IPO Redemption Price unless the original of this Note is
delivered to the Company or Holder notifies
the Company in writing that such original of this Note has been lost, stolen or
destroyed, and Holder executes an
agreement satisfactory to the Company to, among other things, indemnify the Company from any loss incurred by the Company in
connection with such original of this Note. 
Upon surrender by Holder to
the Company of the original of this Note at the office of the Holder to an authorized
representative of the Company, such representative shall issue and deliver to
Holder promptly at such office and in Holder’s
name as shown on the original of this Note, the IPO Conversion Shares or the IPO 

 

12

 

Redemption Price pursuant to the information provided in
the Exercise Notice under “4. Settlement”.

(c)           No
Fractional Shares.  The number of IPO Conversion Shares resulting
from a conversion of this Note
pursuant to Section 3(a)(i) above shall be rounded up to the next higher
integral share of Common Stock, and
no fractional shares shall be issuable by the Company upon conversion of this Note.  Conversion of this Note shall be deemed
payment in full of this Note and this Note shall thereupon be cancelled.

4.                                         Subordination.  The indebtedness evidenced hereby ranks pari
passu in right of payment to all existing and future non-subordinated
indebtedness of the Company, including lease and equipment finance obligations of the Company, indebtedness of the
Company vis-à-vis banks and indebtedness of the Company resulting from the loan agreement dated as of March
5, 2003 between the Company and Boston Scientific Corporation, as
amended.  The indebtedness evidenced
hereby ranks senior in right of payment to all other convertible debt securities issued by the Company insofar as the terms
thereof provide for subordination of the payment thereof, and to all classes and series of the Company’s capital
stock.

5.                                         Redemption.  This Note may be redeemed by the Company at
any time by payment to Holder in immediately available funds of the sum of (i)
the Principal multiplied by the Company Redemption Premium Factor (as defined below) and (ii) the accrued and
unpaid interest on the Company Redemption Date (as defined below).  “Company
Redemption Premium Factor” means (i) 109% if the redemption takes place before 29 November, 2006; (ii) 118% if the redemption
takes place on or after 29 November, 2006 but before 29 November, 2007; or (iii) 127% if the
redemption takes place on or after 29 November, 2007.  The Company must provide written
notice to Holder not less than 30 days prior to the effective date of such
redemption (the “Company Redemption Date”).

6.                                         Representations and Warranties of the Company.  The Company represents and
warrants to Holder as follows:

 

(a)           The
execution and delivery by the Company of this Note (i) are within the Company’s
corporate power and authority, and (ii) have been duly authorized by all
necessary corporate action.

(b)           This Note is a legally binding obligation of the Company, enforceable
against the Company in accordance with the terms hereof, except to the extent
that (i) such enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement
of creditors’ rights, and (ii) the availability of the remedy of specific
performance or in injunctive or other equitable relief is subject to the
discretion of the court before which any proceeding therefore may be brought.

7.                                       Use of Proceeds.  The proceeds received by the Company from the
sale of this Note shall be used by the Company for working capital or other
general corporate purposes.

 

13

 

8.                                       No Waiver in
Certain Circumstances. 
Except as set out in Section 3(b) sentence 5 above, no course of
dealing of Holder nor any failure or delay by Holder to exercise any right,
power or privilege under this Note shall
operate as a waiver hereunder and any single or partial exercise of any such
right, power or privilege shall not preclude any later exercise thereof
or any exercise of any other right, power or privilege hereunder.

9.                                         Certain Waivers by the Company.  Except as expressly provided otherwise in
this Note, the Company and every endorser or guarantor, if any, of
this Note waive presentment, demand, notice, protest and all other demands and
notices in connection with the delivery, acceptance, performance, default or
enforcement of this Note, and assent to any extension or postponement of the
time of payment or any other indulgence, to any substitution, exchange or release of collateral available to Holder, if
any, and to the addition or release of any other party or person
primarily or secondarily liable.

10.                                    No Unlawful
Interest. 
Notwithstanding anything herein to the contrary, payment of any interest
or other amount hereunder shall not be required if such payment would be
unlawful.  In any such event, this Note shall automatically be deemed amended so that
interest charges and all other payments required hereunder, individually
and in the aggregate, shall be equal to but not greater than the maximum
permitted by law.

11.                                    Miscellaneous.  No modification, rescission, waiver,
forbearance, release or amendment of any provision
of this Note shall be made, except by a written agreement duly executed by each
of the Company and Holder.  This
Note may not be conveyed, assigned or transferred by Holder without the prior
written consent of the Company.  All notices hereunder shall be in writing and
be deemed given if personally delivered, sent by overnight courier (provided proof of delivery is received) or sent by
telecopy (provided a confirmation of transmission is received) at the
addresses of the respective parties set forth in the initial paragraph of this
Note or such other address as either party
shall notify the other of from time to time. 
The Company hereby submits to personal
jurisdiction in the State of Maryland, consent to the jurisdiction of any
competent state or federal district
court sitting in the County of Montgomery County, Maryland, and waives any and
all rights to raise lack of personal jurisdiction as a defense in any action,
suit or proceeding in connection with this Note or any related matter.  This Note shall be governed by, and construed
and interpreted in accordance with, the laws of the State of Maryland, without reference to conflicts of law
provisions of such state.

IN
WITNESS WHEREOF, the undersigned have caused this Note to be executed and
delivered by a duly authorized officer as of
the date first above written.

Osiris Therapeutics, Inc.                                                                  [                             ]

 

By:  
_______________________________                               By: 
_______________________________

Name:                                                                                                     Name:

Title:                                                                                                       Title:

 

14

 

ANNEX 2

FORM
OF EXERCISE NOTICE

 

15

 

EXERCISE NOTICE

Osiris
Therapeutics, Inc. (the “Company”)

 

US $ 20,600,000

CONVERTIBLE
PROMISSORY NOTE

due November 28, 2008

(the
“Note”)

When
completed, this Exercise Notice should be delivered in writing or by telefax to
Osiris Therapeutics, Inc. at 2001 Aliceanna
Street, Baltimore, MD 21231, U.S.A., to arrive not later than 15 days after
Holder’s receipt of the Company
Notice pursuant to Section 3(b) sentence 2
of the terms and conditions of the Note (the “Conditions”), or if such date is not a business day, the
immediately succeeding business day (the “Exercise
Date”).

In
the event Holder fails to properly complete this Exercise Notice or to timely
submit a substantially similar form of Exercise Notice to the Company, the
Company shall understand such failure to mean that Holder has elected to have this Note redeemed by the Company
in accordance with Section 3(a)(ii) of the Conditions.

Pursuant
to Section 3(a) of the Conditions, the Note may, at the sole option of Holder,
be, in whole or in part, (i) converted into
shares of the Company’s common stock, par value U.S.$0.001 per share (“Common
Stock”), in accordance with Section
3(a)(i) of the Conditions, or (ii) redeemed by the Company for cash in
accordance with Section 3(a)(ii) of the Conditions. Pursuant to Section 3(b) of the
Conditions, the Holder’s right to elect partial conversion or redemption of this Note may be exercised in increments of
U.S.$100,000.

Capitalized terms used in this Exercise Notice shall have
the meaning attributed to them in the Note.

1.             Name and
Address of Holder:

Name                      [                             ]

Address                 [                             ]

2.             Exercise of Right to Elect Conversion or Redemption Election

a)             Conversion or Redemption in
whole.*

                I hereby elect:

(i)            to convert this Note in whole
pursuant to Section 3(a)(i) of the Conditions; * OR

 

16

 

(ii)                                  to have this
Note redeemed in whole pursuant to Section 3(a)(ii) of the Conditions.*

(b)                                 Conversion
or Redemption in part.*

I hereby elect:

(i)                                     to convert this
Note in part pursuant to Section 3(a)(i) of the Conditions with respect to a
portion of the Principal in the amount of
U.S.$       00,000.00;* AND

(ii)                                  to have this
Note redeemed in part pursuant to Section 3(a)(ii) of the Conditions with
respect to a portion of the Principal in the amount of U.S.$       00,000.00.*

3.             Account
details

Securities Account

No.:                                         ___________________________

Holder:                                   ___________________________

Bank or Broker:                     ___________________________

Bank Code:                            ___________________________

Cash Account

No.:                                         ___________________________

Holder:                                   ___________________________

Bank:                                      ___________________________

Bank
Code:                            ___________________________

 

17

 

4.             Settlement

Set
out in paragraph 3 above are the details of my (i) Securities Account for
delivery by the Company of the IPO
Conversion Shares, if any, and (ii) Cash Account to be credited with payment by
the Company of the IPO Redemption Price, if any.

Name of Holder

Signed/By:

Dated:

 

*              Please delete or complete as
appropriate.

 

18

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]