EXHIBIT 10.1
UBS Warburg UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telephone: 000 000-0000
xxx.xxxxxxxxxx.xxx
September 17, 2001
CONFIDENTIAL
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Advanced Tissue Sciences, Inc.
00000 Xxxxx Xxxxxx Xxxxx Xxxx
Xx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxxx
Chairman of the Board
and Chief Executive Officer
Ladies and Gentlemen:
1. This letter agreement (this "Agreement") confirms the
agreement of Advanced Tissue Sciences, Inc. (the "Company") to engage UBS
Warburg LLC ("UBS Warburg") as exclusive placement agent in connection with the
offer and proposed sale (a "Placement"), whether in one or a series of
transactions, of the Company's common stock, preferred stock (perpetual,
redeemable, convertible or any combination thereof), convertible debentures,
debt or any other securities (collectively, the "Securities"). The term of UBS
Warburg's engagement hereunder shall commence on the date hereof and continue
until the earlier of (i) September 17, 2002 or (ii) termination of this
Agreement in accordance with the provisions of Section 8 of this Agreement (the
"Term").
In its capacity as exclusive placement agent, UBS Warburg is
hereby authorized to offer the Securities at private sale to qualified investors
on terms that have been approved by the Company. In addition, UBS Warburg may
negotiate for the sale of the Securities with certain of such investors (the
"Purchasers"), as a result of which the Company will enter into a purchase
agreement as mutually agreed upon between the Company and the Purchasers for the
sale to the Purchasers of the Securities.
The Company represents and agrees that it will not during the
Term, directly or indirectly, offer any of the Securities for sale to, or
solicit any offers to buy from, any person or persons otherwise than through UBS
Warburg as its exclusive placement agent in connection with the sale of the
Securities. In order to coordinate our efforts in respect of a Placement, the
Company will promptly inform UBS Warburg of any inquiries received from a third
party in respect of a Placement and will not initiate any discussions in respect
of a Placement with a third party without first consulting with UBS Warburg.
2. For UBS Warburg's services hereunder during the Term, the
Company agrees to pay to UBS Warburg in cash each of the fees, as applicable,
set forth below:
Retainer Fee
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(a) A retainer fee of $100,000 (the "Retainer Fee"),
payable promptly upon execution of this Agreement, which
Retainer Fee shall be offset, to the extent previously
paid, against the Placement Fee (defined below) payable
to UBS Warburg by the Company in respect of a Placement.
Placement Fee
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(b) A placement fee, payable on the closing date of a
Placement, equal to (i) 7.0% (the "Placement Fee") of
the gross proceeds received or to be received by the
Company from the sale of the Securities (other than with
respect to the gross proceeds received by the Company
from the sale of Securities to Mehta Partners up to a
total of $2.0 million), subject in all cases to a
Advanced Tissue Sciences, Inc.
September 17, 2001
Page 2
minimum Placement Fee of $1.0 million. Notwithstanding
the foregoing, in the event that there are two closings
for the same Placement or two separate Placements, the
second such closing or Placement of which is completed
within three months of the date of the first such
closing or Placement, and the gross proceeds received
by the Company in connection with the first such closing
or Placement are less than $14.0 million, then the
minimum Placement Fee shall be payable promptly upon
consummation of the second such closing or Placement.
Whether or not a Placement occurs, and in addition to the
compensation described above in this Section 2, the Company will reimburse UBS
Warburg, upon its request from time to time, for the expenses reasonably
incurred by it in entering into and performing services pursuant to this
Agreement, including the reasonable fees and disbursements of UBS Warburg's
counsel; provided that, except as otherwise contemplated by Section 4 hereof,
expenses in excess of $50,000 will require the consent of the Company (which
consent shall not be unreasonably withheld). In no event will UBS Warburg be
responsible for expenses incurred in connection with the issue and sale of the
Securities (including the fees and expenses of any counsel designated by the
Purchasers to act for them).
If, during the Term or nine months following the Term, the
Company decides to pursue any private placement (other than a Placement as
contemplated by this Agreement) or public offering of equity, equity-linked or
debt (including, without limitation, asset-backed) securities or bridge or
syndicated bank loan (a "Financing") then the Company shall offer UBS Warburg
the right to act as sole placement agent, no less than co-lead manager, and
sole arranger, as the case may be, for such Financing under a separate agreement
containing terms and conditions customary for UBS Warburg and mutually agreed
upon by the Company and UBS Warburg.
3. The Company hereby authorizes UBS Warburg to transmit to
prospective Purchasers of the Securities private offering materials prepared or
reviewed and approved by the Company (collectively, the "Materials"). The
documents comprising the Materials, together with a form of purchase agreement
and other documentation relating to the Securities, are the only documents that
are to be delivered to prospective Purchasers in connection with the offering of
the Securities. In connection with UBS Warburg's engagement, the Company will
furnish, or cause to be furnished, to UBS Warburg all publicly available data,
material and other information requested by UBS Warburg for the purposes of
performing the services contemplated hereunder. The Company represents and
warrants to UBS Warburg that the information in the Materials and, to the best
of the Company's knowledge, any other information (whether written or oral)
supplied to UBS Warburg or any prospective Purchaser by or on behalf of the
Company in connection with the performance of UBS Warburg's services hereunder
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not misleading. It is
understood that in performing its services under this engagement UBS Warburg
will be entitled to rely on and use all public information furnished to UBS
Warburg by or on behalf of the Company, prospective purchasers and other parties
and all information that is publicly available without independent verification
thereof, and UBS Warburg will not be responsible in any respect for the
accuracy, completeness or reasonableness of any such information or to conduct
any independent verification thereof or any appraisal of assets or liabilities
(contingent or otherwise).
4. Notwithstanding any other provision of this Agreement, in
the event that UBS Warburg becomes involved in any capacity in any claim, suit,
action, proceeding, investigation or inquiry (including, without limitation, any
shareholder or derivative action or arbitration proceeding) (collectively, a
"Proceeding") in connection with any matter in any way relating to, or referred
to in
Advanced Tissue Sciences, Inc.
September 17, 2001
Page 3
this Agreement or arising out of the matters contemplated by this Agreement, the
Company will reimburse UBS Warburg for its reasonable legal and other expenses
(including the cost of any investigation and preparation) as such expenses are
reasonably incurred by UBS Warburg in connection therewith, except to the extent
that it shall have determined by a court of competent jurisdiction in a judgment
that has become final in that it is no longer subject to appeal or other review
that such expenses resulted primarily from UBS Warburg's gross negligence or
willful misconduct. The Company also agrees to indemnify, defend and hold UBS
Warburg harmless, to the fullest extent permitted by law, from and against any
losses, claims, damages, liabilities and reasonable expenses (A) arising out of
or based upon any untrue statement or alleged untrue statement of any material
fact contained in the Materials or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or (B) in connection with any matter
in any way relating to or referred to in this Agreement or arising out of the
matters contemplated by this Agreement, except to the extent that, in the case
of this clause (B), it shall be determined by a court of competent jurisdiction
in a judgment that has become final in that it is no longer subject to appeal or
other review that such losses, claims, damages, liabilities and expenses
resulted from UBS Warburg's gross negligence or willful misconduct. The Company
shall, if requested by UBS Warburg, assume the defense of any such Proceeding,
including the employment of counsel reasonably satisfactory to UBS Warburg. If
such indemnification were for any reason not to be available or sufficient to
hold UBS Warburg harmless, the Company agrees to contribute to the losses,
claims, damages, liabilities and expenses involved (i) in the proportion
appropriate to reflect the relative benefits paid or received or sought to be
paid or received by the Company and its stockholders and affiliates and other
constituencies, on the one hand, and the party entitled to contribution, on the
other hand, in the matters contemplated by this Agreement or (ii) if (but only
if and to the extent) the allocation provided for in clause (i) is for any
reason held unenforceable, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) but also the relative fault
of the Company and its stockholders and affiliates and other constituencies, on
the one hand, and the party entitled to contribution, on the other hand, as well
as any other relevant equitable considerations. The Company agrees that for
purposes of this Section 4 the relative benefits paid or received, or sought to
be paid or received, by the Company and its stockholders and affiliates and
other constituencies, on the one hand, and the party entitled to contribution,
on the other hand, in the matters contemplated by this Agreement shall be deemed
to be in the same proportion that the total value paid or received or
contemplated to be paid or received by the Company or its stockholders or
affiliates or other constituencies, as the case may be, as a result of or in
connection with the Placement for which UBS Warburg has been retained to perform
financial services bears to the fees paid to UBS Warburg under this Agreement;
provided, that in no event shall the Company contribute less than the amount
necessary to assure that the party entitled to contribution is not liable for
losses, claims, damages, liabilities and expenses in excess of the amount of
fees actually received by UBS Warburg pursuant to this Agreement. Relative fault
shall be determined by reference to, among other things, whether any alleged
untrue statement or omission or any other alleged conduct relates to information
provided by the Company or other conduct by the Company (or its employees or
other agents), on the one hand, or by UBS Warburg, on the other hand. For
purposes of this Section 4, UBS Warburg shall include UBS
Advanced Tissue Sciences, Inc.
September 17, 2001
Page 4
Warburg LLC, any of its affiliates, each other person, if any, controlling UBS
Warburg or any of its affiliates, their respective officers, current and former
directors, employees and agents, and the successors and assigns of all of the
foregoing persons. The foregoing indemnity and contribution agreement shall be
in addition to any rights that UBS Warburg or any indemnified party may have at
common law or otherwise.
5. The Company agrees that neither UBS Warburg nor any of its
affiliates, directors, agents, employees or controlling persons shall have any
liability to the Company or any person asserting claims on behalf of or in right
of the Company in connection with or as a result of either UBS Warburg's
engagement under this Agreement or any matter referred to in this Agreement,
except to the extent that any losses, claims, damages, liabilities or expenses
incurred by the Company are determined by a court of competent jurisdiction in a
judgment that has become final in that it is no longer subject to appeal or
other review to have resulted solely from the gross negligence or willful
misconduct of UBS Warburg in performing the services that are the subject of
this Agreement.
6. Except to the extent legally required (after consultation
with UBS Warburg and its counsel), none of (a) the name of UBS Warburg, (b) any
advice rendered by UBS Warburg to the Company, or (c) any communication from UBS
Warburg in connection with the services performed by UBS Warburg pursuant to
this Agreement will be quoted or referred to orally or in writing, or in the
case of (b) and (c), reproduced or disseminated, by the Company or any of its
affiliates or any of their agents, without UBS Warburg's prior written consent.
7. The Company acknowledges and agrees that the engagement of
UBS Warburg hereunder is not intended to confer rights upon any person
(including shareholders, employees or creditors of the Company) not a party
hereto as against UBS Warburg or its affiliates, or their respective directors,
officers, employees or agents, successors or assigns. UBS Warburg shall act as
an independent contractor under this Agreement, and any duties arising out of
its engagement shall be owed solely to the Company.
8. UBS Warburg's services hereunder may be terminated by the
Company or UBS Warburg upon 30 days prior written notice without liability or
continuing obligation of the Company or UBS Warburg, except that UBS Warburg
shall be entitled to any fees payable pursuant to Section 2 hereof and the
right of first refusal contemplated by Section 2 hereof in accordance with the
terms thereof and except that expenses incurred by UBS Warburg as a result of
services rendered prior to the date of termination for which UBS Warburg is
entitled to reimbursement hereunder shall become immediately payable in full,
and provided further that Sections 3 (other than the first three sentences), 4,
5, 6, 10 and 11 hereof shall remain operative and in full force and effect
regardless of any termination. UBS Warburg shall be entitled to payment in full
of the fees referred to in Section 2 if any time prior to the expiration of nine
months after the Term the Company consummates, or enters into an agreement that
subsequently results in the consummation of, a Placement.
9. UBS Warburg may, at its own expense, place customary
tombstone announcements or advertisements in financial newspapers and journals
describing its services hereunder.
10. THIS AGREEMENT AND ANY CLAIM, COUNTERCLAIM OR DISPUTE OF
ANY KIND OR NATURE WHATSOEVER ARISING OUT OF OR IN ANY WAY RELATING TO THIS
AGREEMENT ("CLAIM"), DIRECTLY OR INDIRECTLY, SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS SET FORTH BELOW,
NO CLAIM MAY BE COMMENCED, PROSECUTED OR CONTINUED IN ANY COURT OTHER
Advanced Tissue Sciences, Inc.
September 17, 2001
Page 5
THAN XXX XXXXXX XX XXX XXXXX XX XXX XXXX LOCATED IN THE CITY AND COUNTY OF NEW
YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, WHICH COURTS SHALL HAVE EXCLUSIVE JURISDICTION OVER THE ADJUDICATION OF
SUCH MATTERS, AND THE COMPANY AND UBS WARBURG CONSENT TO THE JURISDICTION OF
SUCH COURTS AND PERSONAL SERVICE WITH RESPECT THERETO. EACH OF UBS WARBURG AND
THE COMPANY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR
RELATING TO THIS AGREEMENT. THE COMPANY AGREES THAT A FINAL JUDGMENT IN ANY SUCH
PROCEEDING OR COUNTERCLAIM BROUGHT IN ANY SUCH COURT SHALL BE CONCLUSIVE AND
BINDING UPON THE COMPANY AND MAY BE ENFORCED IN ANY OTHER COURTS TO THE
JURISDICTION OF WHICH THE COMPANY IS OR MAY BE SUBJECT, BY SUIT UPON SUCH
JUDGMENT.
11. This Agreement shall be binding upon UBS Warburg and the
Company and their respective successors and assigns and any successor or assign
of any substantial portion of the Company's and UBS Warburg's respective
businesses and/or assets.
Advanced Tissue Sciences, Inc.
September 17, 2001
Page 6
If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below, whereupon
this Agreement and your acceptance shall constitute a binding agreement between
us.
Very truly yours,
UBS WARBURG LLC
By: /s/ Xxxxxxxx X. Xxxxxxx By: /s/ Sage X. Xxxxx
-------------------------------- -------------------------------
Xxxxxxxx X. Xxxxxxx Sage X. Xxxxx
Managing Director Director
Global Head of Healthcare,
Corporate Finance
By: /s/ Xxxxxxx Xxxxxx, III By: /s/ Xxxxxx X. Cape, Ph.D.
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Xxxxxxx Xxxxxx, III Xxxxxx X. Cape, Ph.D.
Managing Director Associate Director
Global Head,
Private Equity Placement Group
Accepted and agreed to as of
the date first above written:
ADVANCED TISSUE SCIENCES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
Chairman of the Board
and Chief Executive Officer
