EXHIBIT 10.1
ADVANCED TISSUE SCIENCES, INC.
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement"), is made and entered into
as of September 19, 2000, by and among Advanced Tissue Sciences, Inc., a
Delaware corporation (the "Company"), and the State of Wisconsin Investment
Board ("Purchaser").
1. AUTHORIZATION OF SALE OF THE SHARES
Subject to the terms and conditions of this Agreement, the Company has
authorized the sale of 3,494,365 shares (the "Shares") of common stock, par
value $0.01 per share (the "Common Stock"), of the Company.
2. AGREEMENT TO SELL AND PURCHASE THE SHARES
2.1 PURCHASE AND SALE
Subject to the terms and conditions of this Agreement, the Purchaser agrees
to purchase, and the Company agrees to sell and issue to the Purchaser, at the
Closing (as defined below) the Shares.
2.2 PURCHASE PRICE
Based upon the purchase price of $5.7235 per share (the "Per Share Price"),
the purchase price for the Shares shall be $20,000,000 (the "Purchase Price").
The Company will not, for ninety (90) days after the Closing Date (as
defined below) without adjusting the Per Share Price hereunder accordingly, sell
in an original issuance (i) shares of Common Stock at a price per share of less
than $5.7235, or (ii) options, warrants or any other securities that can be
converted into, or otherwise exchanged for, shares of Common Stock ("Convertible
Securities") at a conversion or exercise price per share less than $5.7235;
except for shares of Common Stock issued pursuant to (a) stock options, (b)
purchases by the Company of outstanding existing stock options, and (c)
warrants, preferred stock and any other convertible securities. In the event
that, except as provided herein, the Company shall in an original issuance,
during the period ending ninety (90) days after the Closing Date, sell any
shares of Common Stock or any instruments that can be converted into or
otherwise exchanged for Common Stock (the "Subsequent Sale") exercisable at a
price per share (the "Subsequent Purchase Price") of less than $5.7235 per
share, the Company shall within ten (10) business days of the Subsequent Sale
pay to the Purchaser, at the Company's option, in either cash or additional
shares of Common Stock, an amount equal to the number of Shares times the
difference between $5.7235 and the Subsequent Purchase Price. If the Company
elects to pay in Common Stock, the Common Stock shall be valued at the price at
which the Company sold any such shares (or the exercise price for such shares in
the event of the issuance of Convertible Securities) of Common Stock in the
specific transaction that triggered this paragraph of Section 2.2 hereof.
1.
3. DELIVERY OF THE SHARES AT THE CLOSING
(a) The completion of the purchase and sale of the Shares (the
"Closing") shall occur at the offices of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
counsel to the Company, at ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at
10:00 a.m. pacific standard time on September 20, 2000 or such other date and
time as the parties may mutually agree (the "Closing Date").
(b) Upon payment of the Purchase Price in full in immediately available
funds by or on behalf of the Purchaser to the Company by wire transfer to an
account specified by the Company to the Purchaser prior to the Closing Date, the
Company shall authorize its transfer agent (the "Transfer Agent") to issue to
the Purchaser on or before the Closing Date one or more stock certificates
registered in the name of such Purchaser, representing the number of Shares set
forth in Section 1 above and bearing the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"), OR REGISTERED OR
QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY OT BE
TRANSFERRED UNLESS (A) COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND REGISTERED OR QUALIFIED UNDER APPLICABLE STATE SECURITIES
LAWS OR (B) EXEMPTIONS FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS ARE
AVAILABLE. AS A CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE
COMPANY MAY REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT NO REGISTRATION OR QUALIFICATION IS
LEGALLY REQUIRED FOR SUCH TRANSFER.
Prior to the Purchaser's delivery of payment for the Shares, the Company will
deliver via facsimile a copy of the certificates to be delivered on or before
the Closing Date to the office of the Purchaser (at the fax number indicated on
the signature pages attached hereto).
(c) The Company's obligation to complete the purchase and sale of the
Shares shall be subject to the following conditions, any one or more of which
may be waived by the Company:
(i) receipt by the Company of same-day funds in the full amount
of the Purchase Price for the Shares being purchased under this Agreement; and
(ii) the representations and warranties made by the Purchaser in
this Agreement shall be accurate in all material respects and the undertakings
of the Purchaser shall have been fulfilled in all material respects on or
before the Closing Date.
(d) The Purchaser's obligations to accept delivery of such stock
certificates and to pay for the Shares evidenced by the certificates shall be
subject to the following conditions, any one or more of which may be waived by
the Purchaser with respect to such Purchaser's obligation:
2.
(i) the representations and warranties made by the Company in
this Agreement shall be accurate in all material respects and the undertakings
of the Company shall have been fulfilled in all material respects on or before
the Closing Date;
(ii) the Company shall have delivered to the Purchaser a
certificate executed by the Chairman of the Board or President and the chief
financial or accounting officer of the Company, dated the Closing Date, in form
and substance reasonably satisfactory to the Purchaser, to the effect that the
representations and warranties of the Company set forth in Section 4 hereof are
true and correct in all material respects as of the date of this Agreement and
as of the Closing Date, and that the Company has complied with all the
agreements and satisfied all the conditions in this Agreement on its part to be
performed or satisfied on or before the Closing Date; and
(iii) the Company shall have delivered to Purchaser a legal
opinion in substantially the form attached hereto as Exhibit A.
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4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Schedule of Exceptions attached hereto as
Exhibit B, the Company hereby represents and warrants to the Purchaser as
follows (which representations and warranties shall be deemed to apply, where
appropriate, to each subsidiary of the Company):
4.1 ORGANIZATION AND QUALIFICATION
The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware. The
Company has the corporate power and authority to own, lease and operate its
properties and to conduct its business as currently conducted and to enter into
and perform its obligations under this Agreement. The Company is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify would not, singly or in the aggregate, have a material
adverse effect on the condition, financial or otherwise, or the earnings, assets
or business as of the date hereof of the Company.
4.2 CAPITALIZATION
(a) The authorized capital stock of the Company consists of 125,000,000
shares of Common Stock and 1,000,000 shares of Preferred Stock.
(b) As of September 12, 2000, the issued and outstanding capital stock
of the Company consists of 59,869,298 shares of Common Stock. The shares of
issued and outstanding capital stock of the Company have been duly authorized
and validly issued, are fully paid and nonassessable and have not been issued in
violation of or are not otherwise subject to any preemptive or other similar
rights.
(c) The Company has reserved 5,232,603 shares of Common Stock for
issuance upon the exercise of stock options granted or available for future
grant under the Company's stock
3.
option plans and no shares of Common Stock for purchase under the Company's
employee stock purchase plan.
(d) The Company has reserved 1,964,640 shares of Common Stock for
issuance upon the exercise of outstanding warrants to purchase Common Stock.
With the exception of the foregoing, there are no outstanding
subscriptions, options, warrants, convertible or exchangeable securities or
other rights granted to or by the Company to purchase shares of Common Stock or
other securities of the Company and there are no commitments, plans or
arrangements to issue any shares of Common Stock or any security convertible
into or exchangeable for Common Stock.
4.3 ISSUANCE, SALE AND DELIVERY OF THE SHARES
(a) The Shares have been duly authorized for issuance and sale to the
Purchaser pursuant to this Agreement and, when issued and delivered by the
Company pursuant to this Agreement against payment of the consideration set
forth in this Agreement, will be validly issued and fully paid and nonassessable
and free and clear of all pledges, liens and encumbrances. The certificates
evidencing the Shares are in due and proper form under Delaware law.
(b) The issuance of the Shares is not subject to preemptive or other
similar rights. No further approval or authority of the stockholders or the
Board of Directors of the Company will be required for the issuance and sale of
the Shares to be sold by the Company as contemplated in this Agreement.
(c) Subject to the accuracy of the Purchaser's representations and
warranties in Section 5 of this Agreement, the offer, sale, and issuance of the
Shares in conformity with the terms of this Agreement constitute transactions
exempt from the registration requirements of Section 5 of the Securities Act and
from the registration or qualification requirements of the laws of any
applicable state or United States jurisdiction.
4.4 NO BROKER. The Company has not employed any broker or finder and
has not incurred and will not incur any broker's finder's or similar fees,
commissions or expenses payable by the Company in connection with the
transactions contemplated by this Agreement.
4.5 FINANCIAL STATEMENTS
The financial statements included (as exhibits or otherwise) in the Company
Documents (as defined in Section 4.25) present fairly the financial position of
the Company as of the dates indicated and the results of their operations for
the periods specified. Except as otherwise stated in such Company Documents,
such financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis, and any supporting
schedules included with the financial statements present fairly the information
stated in the financial statements. The financial and statistical data set forth
in the Company Documents were prepared on an accounting basis consistent with
such financial statements.
4.
4.6 NO MATERIAL CHANGE
Since September 14, 2000 to the Closing Date,
(a) there has been no material adverse change or any development
involving a prospective material adverse change in or affecting the condition,
financial or otherwise, or in the earnings, assets, or business of the Company,
whether or not arising in the ordinary course of business;
(b) there have been no transactions entered into by the Company other
than those in the ordinary course of business, which are material with respect
to the Company; and
(c) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
The Company has no material contingent obligations.
4.7 ENVIRONMENTAL
Except as would not, singly or in the aggregate, reasonably be expected to
have a material adverse effect on the condition, financial or otherwise, or the
earnings, assets, or business as of the date hereof of the Company,
(a) to the knowledge of the Company, the Company is in compliance with
all applicable Environmental Laws (as defined below);
(b) to the knowledge of the Company, the Company has all permits,
authorizations and approvals required under any applicable Environmental Laws
and is in compliance with the requirements of such permits authorizations and
approvals; and
(c) there are no pending or, to the best knowledge of the Company,
threatened Environmental Claims (as defined below) against the Company.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any United States (or other
applicable jurisdiction's) Federal, state, local or municipal statute, law,
rule, regulation, ordinance, code, policy or rule of common law and any material
judicial or administrative interpretation thereof, including any material
judicial or administrative order, consent decree or judgment, relating to the
environment, health, safety or any chemical, material or substance, exposure to
which is prohibited, limited or regulated by any governmental authority.
"Environmental Claims" means any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigations or proceedings relating in any way to any
Environmental Law.
4.8 NO DEFAULTS
The Company is not in violation of its certificate of incorporation or
bylaws or in material default in the performance or observance of any
obligation, agreement, covenant or condition contained in any material contract,
indenture, mortgage, loan agreement, deed, trust,
5.
note, lease, sublease, voting agreement, voting trust, or other material
instrument or material agreement to which the Company is a party or by which it
may be bound, or to which any of the property or assets of the Company is
subject.
4.9 LABOR MATTERS
No labor dispute with the employees of the Company exists or, to the best
knowledge of the Company, is imminent which could reasonably be expected to have
a material adverse effect on the business of the Company.
4.10 NO ACTIONS
There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company which,
singly or in the aggregate, might result in any material adverse change in the
condition, financial or otherwise, or in the earnings, or business as of the
date hereof of the Company, or which, singly or in the aggregate, might
materially and adversely affect the properties or assets thereof or which might
materially and adversely affect the consummation of this Agreement, nor, to the
best knowledge of the Company, is there any reasonable basis therefor. The
Company is not in default with respect to any judgment, order or decree of any
court or governmental agency or instrumentality which, singly or in the
aggregate, would have a material adverse effect on the assets, properties or
business of the Company.
4.11 INTELLECTUAL PROPERTY
To the knowledge of the Company, the Company has the patent and
intellectual property rights necessary to conduct its business as it is now
being conducted. No claim has been made against the Company regarding its
alleged infringement of the intellectual property or patent rights of others
that would be expected to have a materially adverse effect against the Company.
4.12 PERMITS
To the Company's knowledge, the Company possesses and is operating in
compliance with all material licenses, certificates, consents, authorities,
approvals and permits from all state, federal, foreign and other regulatory
agencies or bodies necessary to conduct the businesses now operated by it, and
the Company has not received any notice of proceedings relating to the
revocation or modification of any such permit or any circumstance which would
lead it to believe that such proceedings are reasonably likely which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would materially and adversely affect the condition, financial or otherwise, or
the earnings, assets, business as of the date hereof of the Company.
4.13 DUE EXECUTION, DELIVERY AND PERFORMANCE
(a) This Agreement has been duly executed and delivered by the Company
and constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, (i) except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors and contracting
6.
parties' rights generally, (ii) except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and (iii) except as the
indemnification agreements in Section 7 hereof may be legally unenforceable.
(b) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated in this Agreement and the
fulfillment of the terms of this Agreement have been duly authorized by all
necessary corporate action and (i) will not conflict with or constitute a breach
of, or default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company pursuant to,
any material contract, indenture, mortgage, loan agreement, deed, trust, note,
lease, sublease, voting agreement, voting trust or other instrument or agreement
to which the Company is a party or by which it may be bound, or to which any of
the property or assets of the Company is subject, and (ii) will not trigger
anti-dilution rights or other rights to acquire additional equity securities of
the Company, nor (iii) will such action result in any violation of the
provisions of the articles of incorporation or bylaws of the Company or any
applicable material statute, law, rule, regulation, ordinance, decision,
directive or order, in each case (i), (ii) or (iii), which individually or in
the aggregate would have a material adverse effect on the condition, properties
or business as of the date hereof of the Company, taken as a whole.
4.14 PROPERTIES
The Company has good and marketable title to its properties, free and clear
of all material security interests, mortgages, pledges, liens, charges,
encumbrances and claims of record. To the Company's knowledge, the properties of
the Company are, in the aggregate, in good repair (reasonable wear and tear
excepted), and suitable for their respective uses. Any real property held under
lease by the Company is held under valid, subsisting and enforceable leases with
such exceptions as are not material and do not materially interfere with the
conduct of the business of the Company. The Company owns or leases all such
properties as are necessary to its business or operations as now conducted.
4.15 COMPLIANCE
The Company has conducted and is conducting its business in compliance with
all applicable material Federal, state, local and foreign statutes, laws, rules,
regulations, ordinances, codes, decisions, decrees, directives and orders,
except where the failure to do so would not, singly or in the aggregate, have a
material adverse effect on the condition, financial or otherwise, or on the
earnings, assets, or business as of the date hereof of the Company.
4.16 USE OF PROCEEDS; INVESTMENT COMPANY
The Company intends to use the proceeds from the sale of the Shares for
working capital and other general corporate purposes. The Company is not now,
and after the sale of the Shares under this Agreement and under all other
agreements and the application of the net proceeds from the sale of the Shares
described in the proceeding sentence will not be an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
7.
4.17 PRIOR OFFERINGS
To the Company's knowledge, all offers and sales of capital stock of the
Company before the date of this Agreement were at all relevant times duly
registered or exempt from the registration requirements of the Securities Act
and were duly registered or subject to an available exemption from the
registration requirements of the applicable state securities or Blue Sky laws.
4.18 TAXES
The Company has filed all material tax returns required to be filed, which
returns are true and correct in all material respects, and the Company is not in
material default in the payment of any taxes, including penalties and interest,
assessments, fees and other charges, shown thereon due or otherwise assessed,
other than those being contested in good faith and for which adequate reserves
have been provided or those currently payable without interest which were
payable pursuant to said returns or any assessments with respect thereto.
4.19 OTHER GOVERNMENTAL PROCEEDINGS
To the Company's knowledge, there are no rulemaking or similar proceedings
before any Federal, state, local or foreign government bodies that involve or
affect the Company, which, if the subject of an action unfavorable to the
Company, could involve a material adverse change in or effect on the condition,
financial or otherwise, or in the earnings, assets or business as of the date
hereof of the Company.
4.20 TRANSFER TAXES
On the Closing Date, all stock transfer or other taxes (other than income
taxes) that are required to be paid by such Closing Date in connection with the
sale and transfer of the Shares to be sold to the Purchaser under this Agreement
will be, or will have been, fully paid or provided for by the Company and all
material laws imposing such taxes will be or will have been fully complied with.
4.21 INSURANCE
The Company maintains insurance of the type and in the amount that the
Company reasonably believes is adequate for its business, including, but not
limited to, insurance covering all real and personal property owned or leased by
the Company against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against by similarly situated companies, all of which
insurance is in full force and effect.
4.22 GOVERNMENTAL CONSENTS
Except as set forth in Section 7 hereof, no registration, authorization,
approval, qualification or consent of any court or governmental authority or
agency is necessary in connection with the execution and delivery of this
Agreement or the offering, issuance or sale of the Shares under this Agreement.
8.
4.23 SECURITIES AND EXCHANGE COMMISSION FILINGS
The Company has timely filed with the Securities and Exchange Commission
(the "Commission") all documents required to be filed by the Company under the
Exchange Act of 1934, as amended (the "Exchange Act.")
4.24 LISTED SECURITIES. By the Closing Date, the Shares will be listed
with the Nasdaq National Market System ("Nasdaq"). Nothing is this Section shall
be interpreted to preclude the Company from listing the Shares on a national
securities exchange in lieu of the Nasdaq National Market.
4.25 ADDITIONAL INFORMATION
The Company represents and warrants that the information contained in the
following documents (the "Company Documents"), which will be provided to
Purchaser before the Closing Date, is or will be true and correct in all
material respects as of their respective filing dates:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000;
(b) the Company's Quarterly Reports on Form 10-Q for the fiscal quarter
ended March 31, 2000 and June 30, 2000;
(c) the Company's Proxy Statement for its 2000 Annual Meeting of
Shareholders; and
(d) all other documents, if any, filed by the Company with the
Commission since June 30, 2000 pursuant to the reporting requirements of the
Securities Exchange Act.
4.26 CONTRACTS
Neither the Company nor, to the knowledge of the Company, any other party
is in material breach of or default under any such contracts described in the
Company Documents or incorporated by reference therein, except for contracts
which would not, singly or in the aggregate, have a material adverse effect on
the business, properties or assets of the Company.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER
5.1 REPRESENTATIONS AND WARRANTIES
Purchaser represents, warrants and covenants to the Company as follows:
(a) No consent, approval, authorization or order of any court,
governmental agency or body or arbitrator having jurisdiction over the Purchaser
is required for the execution of this Agreement or the Purchase of Shares by
the Purchaser.
9.
(b) The Purchaser is knowledgeable, sophisticated and experienced in
making, and is qualified to make, decisions with respect to investments in
shares representing an investment decision like that involved in the purchase of
the Shares, including investments in securities issued by the Company, and has
requested, received, reviewed and considered all information it deems relevant
in making an informed decision to purchase the Shares.
(c) Purchaser has taken all corporate action required to authorize the
execution and delivery of this Agreement and the performance of its obligations
hereunder.
(d) The Purchaser is acquiring the number of Shares set forth in
Section 1 above in the ordinary course of its business and for its own account
for investment (as defined for purposes of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvement Act of 1976 and the regulations thereunder) only, and has no present
intention of distributing any of the Shares nor any arrangement or understanding
with any other persons regarding the distribution of such Shares within the
meaning of Section 2(11) of the Securities Act, other than as contemplated in
Section 7 of this Agreement.
(e) The Purchaser is an institutional investor otherwise exempt from
the reporting requirement of the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (and the regulations thereunder) with respect to the
transaction hereunder;
(f) The Purchaser will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) any of the Shares except in compliance
with the Securities Act and the rules and regulations promulgated thereunder
(the "Rules and Regulations").
(g) The Purchaser has completed or caused to be completed the Stock
Certificate Questionnaire and the Registration Statement Questionnaire, attached
to this Agreement as Appendices I and II, for use in preparation of the
Registration Statement (as defined in Section 7.1 below), and the answers to the
Questionnaires are true and correct as of the date of this Agreement and will be
true and correct as of the effective date of the Registration Statement;
provided that the Purchaser shall be entitled to update such information by
providing notice thereof to the Company before the effective date of such
Registration Statement.
(h) The Purchaser has, in connection with its decision to purchase the
number of Shares set forth in Section 1 above, relied solely upon the Company
Documents and the representations and warranties of the Company contained in
this Agreement.
(i) The Purchaser is an "accredited investor" within the meaning of
Rule 501 of Regulation D promulgated under the Securities Act and has completed
and returned the Investor Questionnaire previously provided by the Company.
5.2 RESALES OF SHARES
(a) The Purchaser hereby covenants with the Company not to make any
sale of the Shares without satisfying the requirements of the Securities Act
and the Rules and Regulations, including, in the event of any resale under the
Registration Statement, the prospectus delivery requirements under the
Securities Act, and the Purchaser acknowledges and agrees that such
10.
Shares are not transferable on the books of the Company pursuant to a resale
under the Registration Statement unless the certificate submitted to the
transfer agent evidencing the Shares is accompanied by a separate officer's
certificate
(i) in the form of Appendix III to this Agreement;
(ii) executed by an officer of, or other authorized person
designated by, the Purchaser; and
(iii) to the effect that (A) the Shares have been sold in
accordance with the Registration Statement and (B) the requirement of delivering
a current prospectus has been satisfied.
(b) The Purchaser acknowledges that there may occasionally be times
when the Company determines the use of the prospectus forming a part of the
Registration Statement (the "Prospectus," as further defined in Section 7.3.1
below) should be suspended until such time as an amendment or supplement to the
Registration Statement or the Prospectus has been filed by the Company and any
such amendment to the Registration Statement is declared effective by the
Commission, or until such time as the Company has filed an appropriate report
with the Commission pursuant to the Exchange Act. The Purchaser hereby covenants
that it will not sell any Shares pursuant to the Prospectus during the period
commencing at the time at which the Company gives the Purchaser written notice
of the suspension of the use of the Prospectus and ending at the time the
Company gives the Purchaser written notice that the Purchaser may thereafter
effect sales pursuant to the Prospectus. The Company may, upon written notice to
the Purchaser, additionally suspend the use of the Prospectus for up to
forty-five (45) days in any 365-day period based on the reasonable determination
of the Company's Board of Directors that there is a significant business purpose
for such determination, including without limitation pending corporate
developments, public filings with the SEC or similar events. The Company shall
in no event be required to disclose the business purpose for which it has
suspended the use of the Prospectus if the Company determines in its good faith
judgment that the business purpose should remain confidential.
(c) The Purchaser further covenants to notify the Company promptly of
the sale of any of its Shares, other than sales pursuant to a Registration
Statement contemplated in Section 7 of this Agreement or sales upon termination
of the transfer restrictions pursuant to Section 7.4 of this Agreement.
5.3 DUE EXECUTION, DELIVERY AND PERFORMANCE
(a) This Agreement has been duly executed and delivered by the
Purchaser and constitutes a valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms.
(b) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated in this Agreement and the
fulfillment of the terms of this Agreement have been duly authorized by all
necessary corporate action and will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Purchaser pursuant to, any
11.
contract, indenture, mortgage, loan agreement, deed, trust, note, lease,
sublease, voting agreement, voting trust or other instrument or agreement to
which the Purchaser is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Purchaser is subject, nor will such
action result in any violation of the provisions of the charter or bylaws of the
Purchaser or any applicable statute, law, rule, regulation, ordinance, decision,
directive or order.
6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Purchaser in this Agreement and in the certificates for the Shares delivered
pursuant to this Agreement shall survive for a period of two (2) years following
the execution of this Agreement, the delivery to the Purchaser of the Shares
being purchased and the payment therefor.
7. FORM D FILING; REGISTRATION; COMPLIANCE WITH THE SECURITIES ACT; COVENANTS
7.1 FORM D FILING; REGISTRATION OF SHARES
7.1.1 REGISTRATION STATEMENT; EXPENSES
Except for such times as the Company may be required to suspend the use of
a prospectus forming a part of the Registration Statement as further described
in Section 5.2 hereof, the Company shall use its reasonable best efforts to:
(a) file in a timely manner a Form D relating to the sale of the Shares
under this Agreement, pursuant to Securities and Exchange Commission Regulation
D.
(b) as soon as practicable after the Closing Date, but in no event
later than the 15th day following the Closing Date, prepare and file with the
Commission a Registration Statement on Form S-3 (or, if the Company is
ineligible to use Form S-3, then on Form S-1) relating to the sale of the Shares
by the Purchaser from time to time on the Nasdaq National Market (or the
facilities of any national securities exchange on which the Company's Common
Stock is then traded) or in privately negotiated transactions (the "Registration
Statement");
(c) subject to receipt of necessary information from the Purchaser,
cause the Commission to notify the Company of the Commission's willingness to
declare the Registration Statement effective on or before 120 days after the
Closing Date;
(d) notify Purchaser promptly upon the Registration Statement being
declared effective by the Commission;
(e) prepare and file with the Commission such amendments and supple-
ments to the Registration Statement and the Prospectus (as defined in Section
7.3.1 below) and take such other action, if any, as may be necessary to keep the
Registration Statement effective until the earlier of (i) two years after the
effective date of the Registration Statement, (ii) the date on which the Shares
may be resold by the Purchaser without registration or without regard to any
12.
volume limitations by reason of Rule 144(k) under the Securities Act or any
other rule of similar effect or (iii) such time as all of the Shares have been
sold pursuant to a registration statement, or Rule 144 under the Securities Act
or any other rule of similar effect;
(f) promptly furnish to the Purchaser with respect to the Shares
registered under the Registration Statement such reasonable number of copies of
the Prospectus, including any supplements to or amendments of the Prospectus, in
order to facilitate the public sale or other disposition of all or any of the
Shares by the Purchaser;
(g) during the period when copies of the Prospectus are required to be
delivered under the Securities Act or the Exchange Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the
Exchange Act within the time periods required by the Exchange Act and the rules
and regulations promulgated thereunder;
(h) file documents required of the Company for customary Blue Sky
clearance in all states requiring Blue Sky clearance; provided, however, that
(a) the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified or
has not so consented; (b) the Company shall not be subjected to general taxation
in any state; and (c) the Company shall not be required to make any change in
its Certificate of Incorporation or Bylaws, which the Company's Board of
Directors determines to be contrary to the best interests of the Company and its
stockholders.
(i) bear all expenses in connection with the procedures in paragraphs
(a) through (e) of this Section 7.1.1 and the registration of the Shares
pursuant to the Registration Statement, including fees and expenses (whether
external or internal) of up to $15,000 of the Purchaser, but not including any
fees and expenses of any other advisers to the Purchaser or brokerage fees and
commissions incurred by the Purchaser.
7.1.2 DELAY IN EFFECTIVENESS OF REGISTRATION STATEMENT
In the event that the Registration Statement is not declared effective by
120 days after the Closing Date, the Company shall pay to the Purchaser
liquidated damages in an amount equal to 0.25% of the Purchase Price of the
Shares purchased by such Purchaser pursuant to this Agreement for each complete
seven-day period after the date that is 120 days after the Closing Date that the
Registration Statement is not declared effective.
7.2 TRANSFER OF SHARES AFTER REGISTRATION
The Purchaser agrees that it will not effect any disposition of the Shares
or its right to purchase the Shares that would constitute a sale within the
meaning of the Securities Act, except as contemplated in the Registration
Statement referred to in Section 7.1 or as otherwise permitted by law, and that
it will promptly notify the Company of any changes in the information set forth
in the Registration Statement regarding the Purchaser or its plan of
distribution.
13.
7.3 INDEMNIFICATION
For the purpose of this Section 7.3, the term "Registration Statement"
shall include any preliminary or final prospectus, exhibit, supplement or
amendment included in or relating to the Registration Statement referred to in
Section 7.1.
7.3.1 INDEMNIFICATION BY THE COMPANY
The Company agrees to indemnify and hold harmless the Purchaser and each
person, if any, who controls the Purchaser within the meaning of the Securities
Act, against any losses, claims, damages, liabilities or expenses, joint or
several, to which the Purchaser or such controlling person may become subject,
under the Securities Act, the Exchange Act, or any other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Company, which consent shall not be unreasonably withheld),
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, including the Prospectus, financial statements and
schedules, and all other documents filed as a part thereof, as amended at the
time of effectiveness of the Registration Statement, including any information
deemed to be a part thereof as of the time of effectiveness pursuant to
paragraph (b) of Rule 430A, or pursuant to Rule 434, of the Rules and
Regulations, or the Prospectus, in the form first filed with the Commission
pursuant to Rule 424(b) of the Regulations, or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) filing is required (the
"Prospectus"), or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state in any of them a material
fact required to be stated therein or necessary to make the statements in any of
them, in light of the circumstances under which they were made, not misleading,
or arise out of or are based in whole or in part on any inaccuracy in the
representations and warranties of the Company contained in this Agreement, or
any failure of the Company to perform its obligations under this Agreement or
under law, and will reimburse Purchaser and each such controlling person for any
legal and other expenses as such expenses are reasonably incurred by Purchaser
or such controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon (i) an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
the Prospectus or any amendment or supplement of the Registration Statement or
Prospectus in reliance upon and in conformity with written information furnished
to the Company by or on behalf of the Purchaser expressly for use in the
Registration Statement or the Prospectus, or (ii) the failure of such Purchaser
to comply with the covenants and agreements contained in Sections 5 or 7 of this
Agreement respecting resale of the Shares, or (iii) the inaccuracy of any
representations made by such Purchaser in this Agreement or (iv) any untrue
statement or omission of a material fact required to make such statement not
misleading in any Prospectus that is corrected in any subsequent Prospectus that
was delivered to the Purchaser before the pertinent sale or sales by the
Purchaser.
14.
7.3.2 INDEMNIFICATION BY THE PURCHASER
The Purchaser will indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the Securities
Act, against any losses, claims, damages, liabilities or expenses (or actions in
respect thereof) to which the Company, each of its directors, each of its
officers who signed the Registration Statement or controlling person may become
subject, under the Securities Act, the Exchange Act, or any other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Purchaser, which consent shall not be unreasonably withheld)
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon (i) any
failure on the part of such Purchaser to comply with the covenants and
agreements contained in Sections 5 or 7 of this Agreement respecting the sale of
the Shares, or (ii) any misrepresentation or breach of any representation or
warranty given or made by such Purchaser in this Agreement, or (iii) any untrue
or alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement to the Registration
Statement or Prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of such Purchaser expressly for use therein or such untrue statement
or alleged untrue statement or omission or alleged omission was delivered to a
subsequent purchaser in a Prospectus which was corrected and delivered to the
Purchaser before the pertinent sale or sales by the Purchaser; provided,
however, that the Purchaser shall not be liable for any such untrue or alleged
untrue statement or omission or alleged omission of which the Purchaser has
delivered to the Company in writing a correction before the occurrence of the
transaction from which such loss was incurred, and the Purchaser will reimburse
the Company, each of its directors, each of its officers who signed the
Registration Statement or controlling person for any legal and other expense
reasonably incurred by the Company, each of its directors, each of its officers
who signed the Registration Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action.
7.3.3 INDEMNIFICATION PROCEDURE
(a) Promptly after receipt by an indemnified party under this Section
7.3 of notice of the threat or commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party under this Section 7.3, promptly notify the indemnifying party in writing
of the claim; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party for
contribution or otherwise under the indemnity agreement contained in this
Section 7.3 to the extent it is not prejudiced as a result of such failure.
(b) In case any such action is brought against any indemnified party
and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the
15.
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with all other indemnifying parties similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action
-------- -------
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it or other indemnified parties that are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 7.3 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless:
(i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate counsel,
approved by such indemnifying party representing all of the indemnified parties
who are parties to such action); or
(ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of action, in each
of which cases the reasonable fees and expenses of counsel shall be at the
expense of the indemnifying party.
7.3.4 CONTRIBUTION
If the indemnification provided for in this Section 7.3 is required by its
terms but is for any reason held to be unavailable to or otherwise insufficient
to hold harmless an indemnified party under this Section 7.3 in respect to any
losses, claims, damages, liabilities or expenses referred to in this Agreement,
then each applicable indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of any losses, claims, damages,
liabilities or expenses referred to in this Agreement
(a) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Purchaser from the placement of Common
Stock, or
(b) if the allocation provided by clause (a) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (a) above but the relative fault of the
Company and the Purchaser in connection with the statements or omissions or
inaccuracies in the representations and warranties in this Agreement that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations.
16.
The respective relative benefits received by the Company on the one hand
and the Purchaser on the other shall be deemed to be in the same proportion as
the amount paid by the Purchaser to the Company pursuant to this Agreement for
the Shares purchased by the Purchaser that were sold pursuant to the
Registration Statement bears to the difference (the "Difference") between the
amount the Purchaser paid for the Shares that were sold pursuant to the
Registration Statement and the amount received by the Purchaser from such sale.
The relative fault of the Company and the Purchaser shall be determined by
reference to, among other things, whether the untrue or alleged statement of a
material fact or the omission or alleged omission to state a material fact or
the inaccurate or the alleged inaccurate representation or warranty relates to
information supplied by the Company or by the Purchaser and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 7.3.3, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
provisions set forth in Section 7.3.3 with respect to the notice of the threat
or commencement of any threat or action shall apply if a claim for contribution
is to be made under this Section 7.3.4; provided, however, that no additional
notice shall be required with respect to any threat or action for which notice
has been given under Section 7.3 for purposes of indemnification. The Company
and the Purchaser agree that it would not be just and equitable if contribution
pursuant to this Section 7.3 were determined solely by pro rata allocation (even
if the Purchaser were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in this paragraph. Notwithstanding the provisions of this Section
7.3, Purchaser shall not be required to contribute any amount in excess of the
amount by which the Difference exceeds the amount of any damages that the
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
7.4 TERMINATION OF CONDITIONS AND OBLIGATIONS
The restrictions imposed by transferability of the Shares shall cease and
terminate as to any particular number of the Shares at such time as an opinion
of counsel satisfactory in form and substance to the Company shall have been
rendered to the effect that such conditions are not necessary in order to comply
with the Securities Act.
7.5 RULE 144 INFORMATION
For two years after the date of this Agreement, the Company shall file all
reports required to be filed by it under the Securities Act, the Rules and
Regulations and the Exchange Act and shall take such further action to the
extent required to enable the Purchaser to sell the Shares pursuant to Rule 144
under the Securities Act (as such rule may be amended from time to time).
17.
8. NOTICES
All notices, requests, consents and other communications under this
Agreement shall be in writing, shall be mailed by first-class registered or
certified airmail, confirmed facsimile or nationally recognized overnight
express courier postage prepaid, and shall be delivered as addressed as follows:
(a) if to the Company, to:
Advanced Tissue Sciences, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Facsimile: (858)_____________
or to such other person at such other place as the Company shall designate to
the Purchaser in writing; and
(b) if to the Purchaser, at its address as set forth on the signature
page to this Agreement, or at such other address or addresses as may have been
furnished to the Company in writing.
Such notice shall be deemed effectively given upon confirmation of receipt
by facsimile, one business day after deposit with such overnight courier or
three days after deposit of such registered or certified airmail with the U.S.
Postal Service, as applicable.
9. MODIFICATION; AMENDMENT
This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and the Purchaser.
10. EXPENSES
Each party to this Agreement shall pay its own fees and expenses incident
to the negotiation, preparation and execution of this Agreement and related
documents (including legal and accounting fees and expenses).
11. HEADINGS
The headings of the various sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed to be part of this
Agreement.
12. SEVERABILITY
If any provision contained in this Agreement should be held to be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in this Agreement shall not
in any way be affected or impaired thereby.
18.
13. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of California and the federal law of the United States of
America without regard to conflict of laws principles.
14. NO CONFLICTS OF INTEREST
The Company represents, warrants and covenants that, to the best of its
knowledge, no officer or employee of the State of Wisconsin Investment Board has
or will receive, directly or indirectly, a personal interest in the Company or
its property or anything of substantial economic value for his or her private
benefit from the Company, or anyone acting on its behalf, in connection with the
investment made pursuant to this Agreement.
15. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of which
shall constitute an original, but all of which, when taken together, shall
constitute but one instrument, and shall become effective when one or more
counterparts have been signed by each party to this Agreement and delivered to
the other parties.
19.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
ADVANCED TISSUE SCIENCES, INC.
By: __________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Its: Chairman and Chief
Executive Officer
STATE OF WISCONSIN INVESTMENT BOARD
By:___________________________________
Name:_________________________________
Title:________________________________
Address:
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile:____________________________
SHARE PURCHASE AGREEMENT
SIGNATURE PAGE
EXHIBIT A
_____, 2000
State of Wisconsin Investment Board
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel for Advanced Tissue Sciences, Inc., a Delaware
corporation (the "Company"), in connection with the issuance and sale of _____
shares of its Common Stock (the "Shares") pursuant to the Advanced Tissue
Sciences, Inc. Stock Purchase Agreement dated [____________, 2000] (the "Stock
Purchase Agreement") between the Company and you. This opinion letter is being
rendered to you pursuant to Section 3(d)(iii) of the Stock Purchase Agreement in
connection with the Closing of the sale of the Shares. Capitalized terms not
otherwise defined in this opinion letter have the meanings given them in the
Stock Purchase Agreement.
In connection with the opinions expressed herein, we have examined
originals or copies identified to our satisfaction as being true copies, of the
following:
(i) The Amended and Restated Certificate of Incorporation of the Company,
including all amendments thereto, as in effect on the date hereof (the "Restated
Certificate");
(ii) The Restated By-laws of the Company, including all amendments thereto,
as in effect on the date hereof (the "Bylaws");
(iii) The resolutions of the Board of Directors of the Company adopted by
written consent and effective as of [_____________] and other evidence of
applicable actions by the Board authorizing the execution and delivery of the
Stock Purchase Agreement, the issuance and sale of the Shares sold by the
Company and other actions with regard thereto;
(iv) The Certificate of Status of the Company certified by the Secretary of
State of the State of California on [_____________] (the "California
Certificate");
(v) The Certificate of Good Standing of the Company certified by the
Secretary of State of the State of Delaware on [______________] (the "Delaware
Certificate");
(vi) The Stock Purchase Agreement;
(vii) A specimen certificate for the shares of Common Stock; and
(viii) Such other records, certificates, documents and instruments,
certified or otherwise identified to our satisfaction, as we have considered
necessary or appropriate for the purposes of this opinion.
1.
As to matters of fact material to the opinions expressed herein, we have
relied upon the representations and warranties as to factual matters contained
in and made by the Company pursuant to the Stock Purchase Agreement and upon
certificates and statements of government officials and of officers of the
Company. In addition, we have obtained from public officials and from officers
and other representatives of the Company such other certificates and assurances
as we consider necessary for purposes of this opinion. We have assumed for the
purposes of this opinion letter the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of the documents submitted to us
as originals, the conformity to the original documents of all documents
submitted to us as certified, facsimile or photostatic copies, and the
authenticity of the originals of such copies.
In rendering this opinion letter we have also assumed: (A) that the Stock
Purchase Agreement has been duly and validly executed and delivered by you, that
you have the power to enter into and perform all your obligation thereunder, and
that the Stock Purchase Agreement constitutes a valid, legal, binding and
enforceable obligation upon you; (B) that the representations and warranties
made in the Stock Purchase Agreement by you are true and correct; (C) that any
wire transfers, drafts or checks tendered by you will be honored; and (D) that
you have received all documents you were to receive under the Stock Purchase
Agreement.
In rendering this opinion we have also assumed that there are no extrinsic
agreements or understandings among the parties to the Stock Purchase Agreement
that would modify or interpret the terms of the Stock Purchase Agreement or the
respective rights or obligations of the parties thereunder.
As used in this opinion letter, the expression "we are not aware" or the
phrase "to our knowledge," or any similar expression or phrase with respect to
our knowledge of matters of fact, means as to matters of fact that, based on the
actual knowledge of individual attorneys within the firm principally responsible
for handling current matters for the Company (and not including any constructive
or imputed notice of any information), and after an examination of documents
referred to herein and after inquiries of certain officers of the Company, no
facts have been disclosed to us that have caused us to conclude that the
opinions expressed are factually incorrect; but beyond that we have made no
factual investigation for the purposes of rendering this opinion letter.
Specifically, but without limitation, we have not searched the dockets of any
courts and we have made no inquiries of securities holders or employees of the
Company, other than such officers.
This opinion letter relates solely to the laws of the State of California,
the General Corporation Law of the State of Delaware and the federal law of the
United States and we express no opinion with respect to the effect or
application of any other laws. Special rulings of authorities administering such
laws or opinions of other counsel have not been sought or obtained. We have not
examined the question of what law would govern the interpretation or enforcement
of the Stock Purchase Agreement, and our opinion with regard to the validity,
binding nature and enforceability of the Stock Purchase Agreement is based upon
the assumption that the internal laws of the State of California would govern
the provisions thereof. Furthermore, we advise you that we are not acting here
as experts on, and we do not express any opinion on any applicable laws, rules
or regulations relating to, (i) patents, copyrights,
2.
trademarks and other proprietary rights and licenses or (ii) the United States
Food and Drug Administration or health care reimbursement.
For purposes of the matters addressed in paragraph 1 below relating to the
valid existence and good standing of the Company under the laws of Delaware, we
have relied solely upon the Delaware Certificate. For purposes of the matters
addressed in paragraph 1 below relating to the due qualification of the Company
in California, we have relied solely upon our review of the California
Certificate.
Based upon our examination of and reliance upon the foregoing and subject
to the limitations, exceptions, qualifications and assumptions set forth below
and except as set forth in the Stock Purchase Agreement or the Schedule of
Exceptions thereto, we are of the opinion that as of the date hereof:
(1) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, and the
Company has the requisite corporate power and authority to own its properties
and to conduct its business as, to our knowledge, it is presently conducted.
The Company is qualified to do business as a foreign corporation in the State
of California.
(2) The Company has the requisite corporate power and authority to
execute, deliver and perform the Stock Purchase Agreement. The Stock Purchase
Agreement has been duly and validly authorized by the Company, duly executed
and delivered by an authorized officer of the Company and constitutes a legal,
valid and binding obligation of the Company, enforceable by you against the
Company in accordance with its terms.
(3) The Shares to be purchased at Closing have been duly authorized
and, upon purchase at the Closing pursuant to the terms of the Stock Purchase
Agreement, will be validly issued, nonassessable, fully paid and free of any
preemptive rights arising under the Restated Certificate or the Delaware General
Corporation Law.
(4) We are not aware that there is any action, proceeding or
governmental investigation pending, or overtly threatened in writing, against
the Company which questions the validity of the Stock Purchase Agreement or the
right of the Company to enter into the Stock Purchase Agreement.
(5) The offer and sale of the Shares by the Company to you is
exempt from the registration requirements of the Securities Act of 1933, as
amended, subject to timely filing of a Form D pursuant to Securities and
Exchange Commission Regulation D.
(6) The Company's execution and delivery of, and its performance
and compliance as of the date hereof with the terms of, the Stock Purchase
Agreement do not violate any provision of the Company's Restated Certificate or
Bylaws.
(7) Other than (i) the filing of a Form D pursuant to the
Securities and Exchange Commission Regulation D, and (ii) the filing of a Form D
with the Securities Commissioners of the states of California and Wisconsin, all
consents, approvals, permits, orders or authorizations of, and all
qualifications by and registrations with, any federal, Delaware
3.
corporate or California state governmental authority on the part of the Company
required in connection with the execution and delivery of the Stock Purchase
Agreement and consummation at the Closing of the transactions contemplated by
the Stock Purchase Agreement have been obtained.
Our opinions expressed above are specifically subject to the following
limitations, exceptions, qualifications and assumptions:
(A) The legality, validity, binding nature and enforceability of the
Company's obligations under the Stock Purchase Agreement may be subject to or
limited by (1) bankruptcy, insolvency, reorganization, arrangement, moratorium,
fraudulent transfer and other similar laws affecting the rights of creditors
generally; (2) general principles of equity (whether relief is sought in a
proceeding at law or in equity), including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, and the discretion of
any court of competent jurisdiction in awarding specific performance or
injunctive relief and other equitable remedies; and (3) without limiting the
generality of the foregoing, (a) principles requiring the consideration of the
impracticability or impossibility of performance of the Company's obligations at
the time of the attempted enforcement of such obligations, and (b) the effect of
court decisions and statutes which indicate that provisions of the Stock
Purchase Agreement which permit you to take action or make determinations may be
subject to a requirement that such action be taken or such determinations be
made on a reasonable basis in good faith or that it be shown that such action is
reasonably necessary for your protection.
(B) We express no opinion as to the Company's or this transaction's
compliance or noncompliance with applicable federal or state antifraud or
antitrust statutes, laws, rules and regulations or the Exon-▇▇▇▇▇▇ Amendment.
(C) We express no opinion concerning the past, present or future fair
market value of any securities.
(D) We express no opinion as to the enforceability under certain
circumstances of any provisions indemnifying a party against, or requiring
contributions toward, that party's liability for its own wrongful or negligent
acts, or where indemnification or contribution is contrary to public policy or
prohibited by law. In this regard, we advise you that in the opinion of the
Securities and Exchange Commission, indemnification of directors, officers and
controlling persons of an issuer against liabilities arising under the
Securities Act of 1933, as amended, is against public policy and is therefore
unenforceable.
(E) We express no opinion as to the enforceability under certain
circumstances of any provisions prohibiting waivers of any terms of the Stock
Purchase Agreement other than in writing, or prohibiting oral modifications
thereof or modification by course of dealing. In addition, our opinions are
subject to the effect of judicial decisions which may permit the introduction of
extrinsic evidence to interpret the terms of written contracts.
(F) We express no opinion as to the effect of any applicable state law,
federal law or equitable principle which provides that a court may refuse to
enforce, or may limit the
4.
application of, a contract or any clause thereof which the court finds to have
been unconscionable at the time it was made or contrary to public policy.
(G) We express no opinion as to your compliance with any Federal or state
law relating to your legal or regulatory status or the nature of your business.
(H) Our opinion in paragraph 7 above is limited to laws and regulations
normally applicable to transactions of the type contemplated in the Stock
Purchase Agreement and do not extend to licenses, permits and approvals
necessary for the conduct of the Company's business. In addition and without
limiting the previous sentence, we express no opinion herein with respect to the
effect of or compliance with any land use, environmental or similar law, any
state or federal antitrust law (including the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended) or any local law. Further, we express no
opinion as to the effect of or compliance with any state or federal laws or
regulations applicable to the transactions contemplated by the Stock Purchase
Agreement because of the nature of your business.
(I) We express no opinion as to the effect of subsequent issuances of
securities of the Company, to the extent that further issuances which may be
integrated with the Closing may include purchasers that do not meet the
definition of "accredited investors" under Rule 501 of Regulation D and
equivalent definitions under state securities or "blue sky" laws.
(J) We express no opinion as to:
(1) The enforceability under certain circumstances of
provisions expressly or by implication waiving broadly or vaguely stated rights,
unknown future rights, or defenses to obligations or rights granted by law,
when such waivers are against public policy or prohibited by law;
(2) The enforceability under certain circumstances of
provisions to the effect that rights or remedies may be exercised without
notice, that failure to exercise or delay in exercising rights or remedies will
not operate as a waiver of any such right or remedy, that rights or remedies
are not exclusive, that every right or remedy is cumulative and may be exercised
in addition to or with any other right or remedy, or that election of a
particular remedy or remedies does not preclude recourse to one or more
remedies;
(3) Any provision providing for the exclusive jurisdiction
of a particular court or purporting to waive rights to trial by jury, service
of process or objections to the laying of venue or to forum on the basis of
forum non conveniens, in connection with any litigation arising out of or
--------------
pertaining to the Stock Purchase Agreement;
(4) Section 13 of the Stock Purchase Agreement to the extent
that it purport to exclude conflict of law principles; and
(5) The effect of any state law, federal law or equitable
principles which limit the amount of attorneys' fees that can be recovered
under certain circumstances.
This opinion letter is rendered as of the date first written above solely
for your benefit in connection with the Stock Purchase Agreement and may not be
delivered to, quoted or relied
5.
upon by any person other than you, or for any other purpose, without our prior
written consent. Our opinion is expressly limited to the matters set forth above
and we render no opinion, whether by implication or otherwise, as to any other
matters relating to the Company. We assume no obligation to advise you of facts,
circumstances, events or developments which hereafter may be brought to our
attention and which may alter, affect or modify the opinions expressed herein.
Very truly yours,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
6.
EXHIBIT B
SCHEDULE OF EXCEPTIONS
7.
APPENDIX I
ADVANCED TISSUE SCIENCES, INC.
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Agreement, please provide us with the
following information:
1. The exact name that your Shares are to be registered in (this is the name
that will appear on your stock certificate(s)). You may use a nominee name if
appropriate:
________________________________
2. The relationship between the Purchaser of the Shares and the Registered
Holder listed in response to item 1 above: __________________________________
3. The mailing address of the Registered Holder listed in response to item 1
above:
________________________________
________________________________
________________________________
________________________________
4. The Social Security Number or Tax Identification Number of the Registered
Holder listed in response to item 1 above:
_______________________________
1.
APPENDIX II
ADVANCED TISSUE SCIENCES, INC.
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information:
1. Pursuant to the "Selling Shareholder" section of the Registration
Statement, please state your or your organization's name exactly as it
should appear in the Registration Statement:
__________________________________________________
2. Please provide the number of shares that you or your organization will own
immediately after Closing, including those Shares purchased by you or your
organization pursuant to this Purchase Agreement and those shares purchased
by you or your organization through other transactions:
__________________________________________________
3. Have you or your organization had any position, office or other material
relationship within the past three years with the Company or its
affiliates?
_____ Yes _____ No
If yes, please indicate the nature of any such relationships below:
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
4. Does the plan of distribution in the draft form of Registration Statement
provided to you reflect your current plan of distribution?
_____ Yes _____ No
If no, please attach a copy of your current plan of distribution.
1.
APPENDIX III
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, an officer of, or other person duly authorized by
_______________________________________________________________________________
[fill in official name of individual or institution]
hereby certifies that he/she/it is the Purchaser of the shares evidenced by the
attached certificate, and as such, sold such shares on ________________, 200__
in accordance with Registration Statement number 333-________________, and
complied with the requirement of delivering a current prospectus in connection
with such sale.
PRINT OR TYPE:
Name of Purchaser (Individual or Institution):
_______________________________________________________________________________
Name of Individual representing Purchaser (if an Institution)
_______________________________________________________________________________
Title of Individual representing Purchaser (if an Institution):
_______________________________________________________________________________
SIGNATURE:
Individual Purchaser or Individual representing Purchaser:
_______________________________________________________________________________
1.