EXHIBIT 10.22(c)
CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED BY MARKING SUCH
PORTIONS WITH ASTERISKS (THE "XXXX"). THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE COMMISSION WITHOUT THE XXXX PURSUANT TO THE COMPANY'S
APPLICATION REQUESTING CONFIDENTIAL TREATMENT.
COMMON STOCK
PURCHASE AGREEMENT
ADVANCED TISSUE SCIENCES, INC.
AND
INAMED CORPORATION
NOVEMBER 1, 1999
TABLE OF CONTENTS
Page
----
Section 1: Purchase and Sale of Stock......................................1
1.1 Sale and Purchase of the Shares................................1
1.2 Closing........................................................1
Section 2: Representations and Warranties of the Company...................2
2.1 SEC Filings....................................................2
2.2 Absence of Certain Changes.....................................2
2.3 Organization, Good Standing and Qualification..................2
2.4 Authorization..................................................2
2.5 Capitalization.................................................3
2.6 Valid Issuance of Stock........................................3
2.7 Governmental Consents..........................................3
2.8 Litigation, etc................................................3
2.9 Subsidiaries...................................................3
2.10 No Conflict with Other Instruments.............................3
2.11 Patents, Trademarks and Regulatory Approvals...................4
2.12 Compliance With Laws...........................................4
Section 3: Purchaser Representations and Warranties........................4
3.1 Authorization..................................................4
3.2 Purchaser's Own Account........................................4
3.3 Disclosure of Information......................................5
3.4 Investment Experience..........................................5
3.5 Restricted Securities..........................................5
3.6 Further Limitations on Disposition.............................5
3.7 Legends........................................................5
3.8 Blue Sky Exemption.............................................5
Section 4: Registration Rights.............................................6
Definitions.................................................................6
4.1 Demand Rights..................................................6
4.2 PiggyBack Rights...............................................7
4.3 Limitations and Obligations of the Company.....................8
4.4 Furnish Information...........................................10
4.5 Expenses of Company Registration..............................10
4.6 Indemnification...............................................10
4.7 Reports Under Securities Exchange Act of 1934.................11
4.8 Assignment of Registration Rights.............................12
4.9 Amendment of Registration Rights..............................12
4.10 Termination of Registration Rights............................12
i
TABLE OF CONTENTS
(continued)
Page
----
Section 5: Covenants......................................................13
5.1 Limitation on Sale of Stock...................................13
5.2 Permitted Transfer............................................13
Section 6: Miscellaneous..................................................13
6.1 Survival of Warranties........................................13
6.2 Successors and Assigns........................................13
6.3 Governing Law.................................................13
6.4 Counterparts..................................................13
6.5 Titles and Subtitles..........................................13
6.6 Assignment....................................................13
6.7 Notices.......................................................14
6.8 Finder's Fee..................................................14
6.9 Expenses......................................................14
6.10 Amendments and Waivers........................................15
6.11 Severability..................................................15
EXHIBIT A Schedule of Exceptions...........................................1
ii
INDEX TO DEFINITIONS
Act...........................................................Section 1.2
Affiliate.....................................................Section 4.8
Agreement..........................................................Intro.
Closing.......................................................Section 1.2
Common Stock....................................................Recital B
Company............................................................Intro.
Effective Date.....................................................Intro.
Exchange Act...............................................Section 4.6(a)
Heads of Agreement..............................................Recital A
Holder..........................................................Section 4
Non-participating Holders..................................Section 4.2(b)
Permitted Sale Date...............................Section 4 & Section 5.1
Purchase Date.....................................Recital B & Section 1.1
Purchase Price....................................Recital B & Section 1.2
Purchaser..........................................................Intro.
Quarterly Reports.............................................Section 2.1
register, registered, and registration..........................Section 4
Registrable Securities..........................................Section 4
Registration Expenses.........................................Section 4.5
Schedule of Exceptions..............................Section 2 & Exhibit A
SEC...........................................................Section 1.2
SEC Filings...................................................Section 2.1
Stock.........................................................Section 1.1
iii
INDEX TO DEFINITIONS
--------------------
Violation..................................................Section 4.6(a)
1998 Annual Report............................................Section 2.1
ii
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is made as of
November 1, 1999 (the "Effective Date") by and between Advanced Tissue Sciences,
Inc., a Delaware corporation (the "Company"), and INAMED corporation, a Delaware
corporation ("Purchaser").
RECITALS
--------
A. This Agreement has been entered into to document the stock purchase and
sale transactions as specified in Section 3(a) of that certain Heads of
Agreement dated as of May 10, 1999 between the Company and Purchaser (the "Heads
of Agreement").
B. Pursuant to the Heads of Agreement, Purchaser has made payments to the
Company for the purchase of shares of the Company's Common Stock, par value $.01
per share ("Common Stock") as follows:
Payment Purchase Price Price/ Shares of
Date Amount Share Stock
05-17-99 $1,000,000 $6.025 165,975
07-15-99 $1,500,000 6.822 219,864
09-14-99 $2,000,000 6.323 316,310
11-01-99 $ 500,000 6.181 80,890
==========
TOTAL $5,000,000 783,039
THE PARTIES HEREBY AGREE AS FOLLOWS:
SECTION 1: Purchase and Sale of Stock.
---------- --------------------------
1.1 Sale and Purchase of the Shares. Pursuant to the terms hereof and in
-------------------------------
reliance upon the representations and agreements contained herein, the Company
has issued and sold to Purchaser, and Purchaser has purchased from the Company,
shares of the Company's Common Stock, $0.01 par value, as set forth in Recital B
above (the "Stock"), at the "Purchase Date" as set forth in Recital B above.
1.2 Closing. Payment of the "Purchase Price" as set forth in Recital B
-------
above was made from Purchaser to the Company on the dates set forth in Recital B
above. To the extent not previously delivered, delivery of the Stock shall take
place at a closing to be held at the offices of the Company as soon as is
practical (which time and place are designated as the "Closing"). To the extent
not previously delivered, at the Closing the Company shall deliver to Purchaser
a certificate or certificates representing the Stock, in consideration of
Purchaser's prior payment to the Company of the Purchase Price. The Stock will
not be registered with the U.S. Securities
---
and Exchange Commission ("SEC") under the U.S. Securities Act of 1933, as
amended (the "Act") unless and until registration occurs pursuant to Section 4
hereof.
SECTION 2: Representations and Warranties of the Company. Subject to and
--------- ---------------------------------------------
except as disclosed in the SEC Filings (defined in Section 2.1 hereof) and/or in
the Schedule of Exceptions attached hereto as Exhibit A, the Company hereby
represents and warrants to Purchaser that as of the date hereof:
2.1 SEC Filings. Purchaser previously has had access to the Company's
-----------
publicly available information through the SEC's Electronic Data Gathering and
Retrieval System, including the Company's (i) Annual Report on Form 10-K, as
amended, for the fiscal year ended December 31, 1998 (the "1998 Annual Report");
(ii) most recent Quarterly Report on Form 10-Q, as amended (the "Quarterly
Reports"); (iii) proxy statements relating to the meetings of its stockholders
in 1999; (iv) all other reports and registration statements (except registration
statements on Form S-8) filed by the Company with the SEC since December 31,
1997; and (v) audited financial statements for the fiscal years ended and as of
December 31, 1997 and 1998. As of their respective dates, the SEC Filings (as
hereinafter defined) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. Since December 31, 1997, the Company has filed with the
SEC all reports and registration statements and all other filings required to be
filed with the SEC under the rules and regulations of the SEC. The audited
financial statements and unaudited interim financial statements of the Company
included or incorporated by reference in the 1998 Annual Report and the
Quarterly Reports, respectively, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis (except as may be
indicated therein or in the notes thereto, and with respect to the unaudited
interim financial statements, except as to normal year-end auditing adjustments
and the absence of notes) and fairly present the financial position of the
Company and its subsidiaries as at the dates thereof and the results of their
operations, cash flows and changes in financial position for the periods then
ended. As used in this Agreement, "SEC Filings" means the reports, registration
statements, proxy statements and audited financial statements of the Company
referred to in clauses (i) through (v) of the first sentence of this Section
2.1.
2.2 Absence of Certain Changes. Except as set forth in the SEC Filings
--------------------------
and/or the Schedule of Exceptions, since December 31, 1998, there has not been
any material adverse change, outside the ordinary course of business, in the
assets, condition, affairs or prospects of the Company and its subsidiaries,
financial or otherwise.
2.3 Organization, Good Standing and Qualification. The Company is a
---------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted and as currently proposed to be
conducted. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure so to qualify would have a
material adverse effect on its business, properties or financial condition.
2.4 Authorization. This Agreement constitutes a valid and legally binding
-------------
obligation of the Company, enforceable against the Company in accordance with
its terms. The Company
2
has all the requisite corporate power and is duly authorized to execute and
deliver this Agreement, and all corporate actions on the part of the Company,
its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement and consummation of the transactions
contemplated hereby have been taken.
2.5 Capitalization. The authorized capital stock of the Company consists of
--------------
125,000,000 shares of Common Stock, of which 52,849,210 shares are issued and
outstanding (including the shares to be issued to Purchaser pursuant to this
Agreement), as of the Effective Date of this Agreement, and 1,000,000 shares of
Preferred Stock, of which 100.8 shares are issued and outstanding as of the date
of this Agreement. All such issued and outstanding shares have been duly
authorized and validly issued, and are fully paid and non-assessable. Except as
set forth in notes to the SEC Filings or subsequently granted or awarded under
the Company's 1999 Stock Incentive, there are no preemptive or other outstanding
rights, options, warrants, conversion rights or agreements for the purchase or
acquisition from the Company of any shares of its capital stock or other
securities of the Company. All of the outstanding shares of Common Stock and the
Preferred Stock have been duly and validly issued in compliance with federal and
state securities laws.
2.6 Valid Issuance of Stock. The Stock, as issued, sold and delivered in
-----------------------
accordance with the terms hereof for the consideration expressed herein, was
duly authorized and validly issued, fully paid and non-assessable and, based in
part upon the representations of Purchaser in this Agreement, was issued in
compliance with all applicable federal and state securities laws.
2.7 Governmental Consents. No consent, approval, order or authorization of,
---------------------
or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
this Agreement, except for notices required or permitted to be filed with
Nasdaq, the SEC and with certain state securities commissions after the Closing,
which notices will be filed on a timely basis.
2.8 Litigation, etc. There is no action, suit, proceeding or investigation,
---------------
pending or threatened, (i) which questions the validity of this Agreement or any
other agreement contemplated hereby or the right of the Company to enter into
such agreements, or (ii) which might result, either individually or in the
aggregate, in any material adverse change in the assets, condition, affairs or
prospects of the Company and its subsidiaries, financial or otherwise, or (iii)
which is against the Company or any employee or officer of or consultant to the
Company or any of its subsidiaries, by reason of the past employment or
consulting relationships of any employee, officer or consultant of the Company.
2.9 Subsidiaries. The Company does not presently own or control, directly
------------
or indirectly, and has no stock or other interest as owner or principal in, any
other corporation or partnership, joint venture, association or other business
venture or entity, other than as listed on the Schedule of Exceptions.
2.10 No Conflict with Other Instruments. The execution, delivery and
----------------------------------
performance of this Agreement will not result in any violation of, be in
conflict with, or constitute a default under, with or without the passage of
time or the giving of notice: (i) any provision of the
3
Company's Certificate of Incorporation or By-laws; (ii) any provision of any
judgment, decree or order to which the Company or any of its subsidiaries is a
party or by which it is bound; (iii) any material contract, obligation or
commitment to which the Company or any of its subsidiaries is a party or by
which it is bound; or (iv) to the Company's knowledge, any statute, rule or
governmental regulation applicable to the Company or any of its subsidiaries.
2.11 Patents, Trademarks and Regulatory Approvals. The Company owns or has
--------------------------------------------
sufficient rights in the Company's technology and trademarks, to conduct the
business of the Company as contemplated by the Heads of Agreement (as referenced
at the beginning of this Agreement). The Company is not aware of any existing or
threatened infringement action against the Company or claim of invalidity or
adverse ownership with respect to the Company's technology to be used in
conjunction with the Heads of Agreement, or of any facts which indicate that any
such action or claim is likely to be instituted or asserted.
THE COMPANY MAKES NO WARRANTIES OTHER THAN AS SET FORTH IN THIS
SECTION 2.11 CONCERNING THE COMPANY'S TECHNOLOGY, PATENT RIGHTS AND INTELLECTUAL
PROPERTY RIGHTS, INCLUDING WITHOUT LIMITATION, THE COMPANY MAKES NO EXPRESS OR
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. EXCEPT
AS SET FORTH IN THIS SECTION 2.11, THE COMPANY MAKES NO WARRANTY OR
REPRESENTATION AS TO THE VALIDITY OR SCOPE OF THE COMPANY PATENT RIGHTS, OR THAT
ANY PRODUCT WILL BE FREE FROM AN INFRINGEMENT ON PATENTS OF THIRD PARTIES, OR
THAT NO THIRD PARTIES ARE IN ANY WAY INFRINGING ATS TECHNOLOGY PATENT RIGHTS.
2.12 Compliance With Laws. To the best of the actual knowledge of the
--------------------
officers of the Company, the Company believes that it is in compliance with all
laws, rules and regulations applicable to the Company and its current business,
non-compliance of which would have a material adverse affect on the Company or
its business.
SECTION 3: Purchaser Representations and Warranties. Purchaser hereby
---------- ----------------------------------------
represents and warrants as of the date hereof:
3.1 Authorization. This Agreement constitutes a valid and legally binding
-------------
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms. Purchaser has all the requisite corporate power and is duly authorized to
execute and deliver this Agreement, and all corporate action on the part of the
Purchaser, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby has been taken.
3.2 Purchaser's Own Account. Purchaser confirms (a) that the Stock received
-----------------------
by Purchaser has been acquired for investment for Purchaser's own account, not
as a nominee or agent, and not with a view to the resale or distribution of any
part thereof, and (b) that Purchaser has no present intention of selling or
granting any participation in, or otherwise distributing the same. By executing
this Agreement, Purchaser further represents that Purchaser does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to such person or to any third person, with
respect to any of the Stock. Purchaser
4
understands that the Stock purchased by it has not been registered under the Act
by reason of a specific exemption from the registration provisions of the Act
which depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.
3.3 Disclosure of Information. Purchaser has had an opportunity to ask
-------------------------
questions of the Company regarding the terms and conditions of the private
placement of the Stock and has received satisfactory answers to all such
questions. The foregoing, however, does not limit or modify the representations
and warranties of the Company in Section 2 of this Agreement.
3.4 Investment Experience. Purchaser is an "accredited investor" as defined
---------------------
in Rule 501(a) promulgated under the Act. Purchaser is able to bear the economic
risk of its investment in the Company, including the entire loss of such
investment. Purchaser has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of the
investment in the Stock, and Purchaser has had the opportunity to evaluate the
merits and risks of its investment in the Stock.
3.5 Restricted Securities. Purchaser understands that the shares of Stock,
---------------------
issued and sold pursuant to this Agreement, are "restricted securities" under
Rule 144 under the Act, and must be held by Purchaser indefinitely unless
subsequently registered under the Act or an exemption from such registration is
available. In this connection, Purchaser represents that it is familiar with
Rule 144 of the Act as presently in effect, and understands the resale
limitations imposed thereby and by the Act.
3.6 Further Limitations on Disposition. Without in any way limiting the
----------------------------------
representations set forth above, Purchaser agrees not to make any disposition of
all or any portion of the Stock except in accordance with Section 5.1 hereof.
3.7 Legends. It is understood that the certificates evidencing the Stock
-------
may bear one or more of the following legends:
(a) "These securities have not been registered under the Securities Act
of 1933, as amended or any state securities laws. They may not be sold, offered
for sale, pledged or hypothecated in the absence of any effective registration
statement as to the securities under said Act and any applicable securities
laws, or an opinion of counsel (in form and substance satisfactory to the
Company) that such registration is not required or unless sold pursuant to Rule
144 or 144A of such Act or registration under the Act is unnecessary in order
for such transfer to comply with the Act."
(b) The sale or transfer of these securities is restricted until after
[** ].
(c) Any legend that may be required by the Commissioner of Corporations
of the State of California or required pursuant to any state, local or foreign
laws governing such securities.
3.8 Blue Sky Exemption. For purposes of state blue sky securities
------------------
regulations, Purchaser represents that it has its home office in the State of
California.
5
SECTION 4: Registration Rights
---------- -------------------
Definitions. For purposes of this Section 4: (a) The term "register,"
-----------
"registered," and "registration" refer to a registration effected by preparing
and filing a registration statement or similar document in compliance with the
Act, and the declaration or ordering of effectiveness of such registration
statement or document; (b) The term "Registrable Securities" means (1) the Stock
sold by the Company to Purchaser pursuant to the terms of this Common Stock
Purchase Agreement and the shares of Common Stock purchased upon exercise of
Common Stock Purchase Warrant of even date, and (2) any common stock of the
Company issued as (or issuable upon the conversion or exercise of any warrant,
right or other security which is issued as) a dividend or other distribution
with respect to, or in exchange for or in replacement of, the Stock referred to
in clause (1) above, excluding in all cases, however, any Registrable Securities
sold by a person in a transaction in which such person's rights are not derived
by assignment under this Section 4; (c) The term "Holder" means Purchaser or any
assignee thereof in accordance with Section 4.8 hereof; (d) The term "Permitted
Sale Date" means [** ].
4.1 Demand Rights.
-------------
(a) Registration. After the Permitted Sale Date, if the Company
receives a written request from Purchaser that the Company register all or part
of the Registrable Securities, then the Company shall:
(i) within ten (10) days after receipt thereof, give written notice
of such request to all other Holders known to the Company; and
(ii) subject to the limitations of Section 4.1(c) hereof, use its
diligent efforts to prepare and file with the SEC as soon as practicable, and in
any event within sixty (60) days after receipt of such request, a registration
statement under the Securities Act which shall include all Registrable
Securities which the participating Holders request the Company to register
pursuant to a written request delivered to the Secretary of the Company and
received by such Secretary within twenty (20) days after the Company mails
notice to the other Holders pursuant to Section 4.1(a)(i) hereof.
(b) Underwriting. In connection with a registration effected pursuant
------------
to this Section 4.1, if the participating Holders intend to distribute some or
all of the Registrable Securities covered by their requests through an
underwritten public offering, then the underwriter will be selected by the
participating Holders and shall be reasonably acceptable to the Company. The
participating Holders and the Company shall enter into an underwriting agreement
in customary form with the selected underwriter. If any Holder declines to
execute such underwriting agreement, then such Holder shall not have any right
to include any Registrable Securities in such underwriting. Notwithstanding any
other provision of this Section 4.1(b), if the underwriter advises the
participating Holders and the Company in writing that marketing factors require
a limitation of the number of shares to be underwritten, then the number of
shares of Registrable Securities that may be included in the underwriting shall
be allocated among all of the participating Holders thereof, in proportion to
the amount of Registrable Securities of the Company held by each participating
Holder; provided, however, that the number of shares of Registrable Securities
owned by the participating Holders shall not be reduced until all other
6
non-Holders, if any, have been eliminated entirely. The registration statement
filed pursuant to the request of the participating Holders may include other
Company securities held by persons with registration rights and may also include
securities of the Company being sold by the Company for its own account,
provided that if more than 50% of the shares sold in such offering are for the
account of the Company, then such registration shall not be counted for the
purpose of the limitation set forth in Section 4.1(c)(ii).
(c) Limitations. The Company shall not be obligated to effect, or to
-----------
take any action to effect, any registration pursuant to this Section 4.1:
(i) In any jurisdiction in which the Company would be required to
execute a general consent to service of process in effecting such registration,
qualification, or compliance, unless the Company is already subject to service
of process in such jurisdiction and except as may be required by the Act.
(ii) After any or all of the Holders have registered any
Registrable Securities pursuant to this Section 4.1 on one occasion or any
demand registration rights with the Company under other agreements or warrant
related to the Heads of Agreement; provided, however, that if all of the
participating Holders notified the Company in writing and withdrew their request
to register their Registrable Securities pursuant to this Section 4.1 prior to
the filing of the registration statement in connection with such registration,
and paid the Registration Expenses (as defined below) in connection with such
registration, then such registration shall not be counted for purposes of this
limitation. For avoidance of doubt, the Company is obligated to make only one
demand registration between both this Agreement and the Common Stock Purchase
Warrant of even date.
(iii) At any time during the period beginning when the Company has
commenced registration procedures (whether by means of holding discussions with
an underwriter or commencing preparation of the registration statement) with
respect to the filing of another registration statement (other than on Form S-8
or S-4) of the Company with the SEC which it in good faith expects to file
within thirty (30) days and ending the earliest of (A) the abandonment of such
other offering; or (B) 180 days after the effective date of such other
registration statement relating to the other offering (or such shorter period as
any underwriter may require).
(iv) If the Company shall furnish to the Holders a certificate
signed by the President or Chief Executive Officer of the Company stating that
in the good faith judgment of the Board of Directors of the Company, it would be
detrimental to the Company and its stockholders for a registration statement to
be effected at such time, in which event the Company shall have the right to
defer the filing of the registration statement for a period of not more than 120
days and for not more than once in any 12-month period.
4.2 PiggyBack Rights.
----------------
(a) Notice of Registration. Anytime after the Permitted Sale Date, if
----------------------
(but without any obligation to do so) the Company proposes to register
(including for this purpose a registration effected by the Company for stock-
holders other than the Holders) any of its stock or
7
other securities under the Act in connection with the public offering of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock plan), the Company shall,
at such time, promptly give each Holder written notice of such registration.
Upon the written request of each Holder given within 20 days after mailing of
such notice by the Company in accordance with Section 6.7 hereof, the Company
shall, subject to the provisions of Section 4.2(b) hereof, cause to be
registered under the Act all of the Registrable Securities that each such Holder
has requested to be registered. No Holder shall have any rights under this
Section 4.2 unless the Holder requests registration of at least 50,000 shares of
Common Stock, or such Holder requests registration of all the Registrable
Securities held by such Holder at such time.
(b) Underwriting. If the registration of which the Company gives notice
------------
is for a registered public offering involving an underwriting, the Company shall
so advise the Holders as a part of the written notice given pursuant to this
Section 4.2(a) hereof. In such event, the right of any Holder to registration
pursuant to Section 4.2 shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and the other Holders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company.
Notwithstanding any other provision of this Section 4.2, if the underwriter
determines that marketing factors require a limitation of the number of shares
to be underwritten, the underwriter may exclude some or all Registrable
Securities from such registration and underwriting. The Company shall so advise
all Holders (except those Holders who have indicated to the Company their
decision not to distribute any of their Registrable Securities through such
underwriting ("Non-participating Holders")), and the number of shares of
Registrable Securities that may be included in the registration and underwriting
shall be allocated among such Holders in proportion, as nearly as practicable on
a pari passu basis, to the respective amounts of Company securities owned by
such Holders at the time of filing the registration statement; provided,
--------
however, that all Registrable Securities proposed to be sold for the account of
-------
the Non-participating Holders (or their transferees) shall be excluded from the
registration and underwriting prior to any reduction in the number of
Registrable Securities proposed to be sold for the account of other Holders. No
Registrable Securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration. If
any Holder disapproves of the terms of any such underwriting, such person may
elect to withdraw therefrom by written notice to the Company and the
underwriter. The Registrable Securities and/or other securities so withdrawn
from such underwriting shall also be withdrawn from such registration; provided,
however, that, if by the withdrawal of such Registrable Securities a greater
number of Registrable Securities held by other Holders may be included in such
registration (up to the maximum of any limitation imposed by the underwriters),
then the Company shall offer to all Holders who have included Registrable
Securities in the registration the right to include additional Registrable
Securities in the same proportion used above in determining the underwriter
limitation.
4.3 Limitations and Obligations of the Company. Notwithstanding anything to
------------------------------------------
the contrary herein, the Company shall have no obligation under Sections 4.1 and
4.2 to register any Registrable Securities at a time when all of said
Registrable Securities may be sold within a
8
90-day period on the public market pursuant to SEC Rule 144 or pursuant to a
Form S-3 registration made available by the Company to the Registrable
Securities. Whenever required under this Section 4 to effect the registration of
any Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(a) Prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, if based upon a demand from a
Holder, keep such registration statement effective until all of the shares of
Stock have been sold.
(b) Prepare and file with the SEC 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
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to 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 Holders, provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing; in which
event, the Company shall update that prospectus as soon as is reasonably
feasible.
(g) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Section 4, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Section 4, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
9
registration of Registrable Securities and (ii) a letter dated such date, from
the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities.
4.4 Furnish Information. It shall be a condition precedent to the
-------------------
obligations of the Company to a particular selling Holder to take any action
pursuant to this Section 4 that such selling Holder shall furnish to the Company
such information regarding itself, the Registrable Securities held by it, and
the intended method of disposition of such securities as shall be required to
effect the registration of such selling Holder's Registrable Securities.
4.5 Expenses of Company Registration. The Company shall bear and pay all
--------------------------------
expenses (the "Registration Expenses") incurred in connection with any
registration, filing or qualification of Registrable Securities with respect to
the registrations pursuant to Section 4.1 and 4.2 hereof, including (without
limitation) all registration, filing and qualification fees, printers costs,
Company attorneys' fees, and accounting fees relating or apportionable thereto,
and up to $5,000 for the fees and disbursements of one counsel for the selling
Holders selected by them, but excluding underwriting discounts and commissions
relating to Registrable Securities.
4.6 Indemnification. In the event any Registrable Securities are included
---------------
in a registration statement under this Section 4:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each Holder, the officers and directors of each Holder, any underwriter
(as defined in the Act) for such Holder and each person, if any, who controls
such Holder or underwriter within the meaning of the Act or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), against any losses,
claims, damages or liabilities (joint or several) to which they may become
subject under the Act, the Exchange Act or other federal, state and securities'
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
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Act, the Exchange
Act or any state securities law; and the Company will reimburse each such
Holder, officer or director, underwriter or controlling person for any legal or
other expenses as 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 subsection 4.6(a) 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), nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for
10
use in connection with such registration by any such Holder, officer, director,
underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers who
have signed the registration statement, each person, if any, who controls the
Company within the meaning of the Act, any underwriter and any other Holder
selling securities in such registration statement or any of its directors or
officers or any person who controls such Holder, against any losses, claims,
damages or liabilities (joint or several) to which the Company or any such
director, officer, controlling person, or underwriter or controlling person, or
other such Holder or director, officer or controlling person, may become
subject, under the Act, the Exchange Act, or other federal or state law, insofar
as such losses, claims, damages or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder expressly for use
in connection with such registration; and each such Holder will reimburse any
legal or other expenses as incurred by the Company or any such director,
officer, controlling person, underwriter or controlling person, other Holder,
officer, director, or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this subsection 4.6(b) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Holder, which
consent shall not be unreasonably withheld; provided, that, in no event shall
any indemnity under this subsection 4.6(b) exceed the gross proceeds from the
offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section
4.6 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 4.6, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 4.6, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 4.6.
(d) The obligations of the Company and Holders under this Section 4.6
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 4, and otherwise.
4.7 Reports Under Securities Exchange Act of 1934. With a view to making
---------------------------------------------
available to the Holders the benefits of Rule 144 promulgated under the Act and
any other rule or
11
regulation of the SEC that may at any time permit a Holder to sell securities of
the Company to the public without registration or pursuant to a registration on
Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after the Closing;
b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the Exchange Act; and
(c) furnish to any Holder, so long as the Holder owns any Registrable
Securities, on an annual basis or otherwise, upon request (i) a written
statement by the Company that it has complied with the reporting requirements of
SEC Rule 144, the Act and the Exchange Act, or that it qualifies as a registrant
whose securities may be resold pursuant to Form S-3 (at any time after it so
qualifies), (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company and (iii)
such other information as may be reasonably requested in availing any Holder of
any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to any such SEC rule or regulation.
4.8 Assignment of Registration Rights. The rights to cause the Company to
---------------------------------
register Registrable Securities pursuant to this Section 4 may be assigned by
the Purchaser only to an "Affiliate" of the Purchaser, and only where (i) such
transfer is effected in accordance with applicable federal and state securities
laws, (ii) such Affiliate becomes a party to this Agreement or agrees in writing
to be subject to the terms hereof to the same extent as if it were an original
purchaser hereunder and (iii) the Company is, within a reasonable time after
such transfer, furnished with written notice of the name and address of such
Affiliate and the securities with respect to which such registration rights are
being assigned; and provided, further, that such assignment shall be effective
only if immediately following such transfer the further disposition of such
securities by such Affiliate is restricted under the Act. "Affiliate" for
purposes of this Section 4.8 shall mean any corporation or other entity
controlling, controlled by, or under common control with Purchaser.
4.9 Amendment of Registration Rights. Any provision of this Section 4 may
--------------------------------
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of a majority of the Registrable
Securities. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon the holder of any securities purchased under this
Agreement at the time outstanding (including securities into which such
securities are convertible), each future holder of all such securities, and the
Company.
4.10 Termination of Registration Rights. The Company's obligations pursuant
----------------------------------
to this Section 4 shall terminate [** ] from the date of this
Agreement, excepting however, the parties' indemnification rights and
obligations shall survive for the applicable statute of limitations period.
12
SECTION 5: Covenants.
--------- ---------
5.1 Limitation on Sale of Stock. Purchaser hereby agrees that it will not
---------------------------
sell any of the shares of the Stock prior to [** ] (the "Permitted
Sale Date"). After the Permitted Sale Date, Purchaser will be entitled to sell
or transfer any or all of the shares of the Stock in any manner that it shall
determine, provided that such transfer or sale is in accordance with the federal
--------
securities laws, and provided, further, that Purchaser shall notify in writing
-------- -------
the Company of Purchaser's intention to effect sales at least two business days
prior to the first sale effected in any calendar month; provided, however,
Purchaser shall coordinate any such sale made in the public stock market through
a nationally recognized underwriting firm reasonably acceptable to the Company.
These limitations on sale of the Stock shall be applicable on any Holder until
the Stock is sold in the public stock market.
5.2 Permitted Transfer. As an exception to the transfer restrictions set
------------------
forth in Section 5.1 hereof, Purchaser may transfer the Stock to an Affiliate of
Purchaser, so long as the Affiliate agrees in writing to be bound by all of the
provisions of this Agreement.
SECTION 6: Miscellaneous.
---------- -------------
6.1 Survival of Warranties. The warranties, representations and covenants
----------------------
of the Company contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing and shall in no way be
affected by any investigation of the subject matter thereof made by or on behalf
of Purchaser.
6.2 Successors and Assigns. The terms and conditions of this Agreement
----------------------
shall inure to the benefit of and be binding upon the respective permitted
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective permitted successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
6.3 Governing Law. This Agreement shall be governed by and construed under
-------------
the laws of the State of California.
6.4 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Signatures may be
transmitted by facsimile.
6.5 Titles and Subtitles. The titles and subtitles used in this Agreement
--------------------
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
6.6 Assignment. This Agreement may not be assigned or otherwise
----------
transferred, nor, except as expressly provided hereunder, may any right or
obligations hereunder be assigned or transferred, by either party without the
written consent of the other party; provided, however, that either the Company
or Purchaser may, without such consent, assign this Agreement and its rights and
obligations thereunder (a) in connection with the transfer or sale of all or
substantially all of its business, if such assets include substantially all of
the assets relating to its performance of its respective obligations hereunder,
(b) to a wholly owned subsidiary or (c) in the event of its
13
merger or consolidation with another company at any time during the term of this
Agreement. Any purported assignment in violation of the preceding sentence shall
be void. Any permitted assignee shall assume all obligations of its assignor
under this Agreement.
6.7 Notices. Any notice or report required or permitted to be given or made
-------
under this Agreement by one of the parties hereto to the other shall be in
writing, delivered personally or by facsimile (and promptly confirmed by
personal delivery or courier) or courier, postage prepaid, addressed to such
other party at its address indicated below, or to such other address as the
addressee shall have last furnished in writing to the addressor and shall be
effective upon receipt by the addressee.
The Company:
Advanced Tissue Sciences, Inc.
00000 Xxxxx Xxxxxx Xxxxx Xxxx
Xx Xxxxx, Xxxxxxxxxx 00000
Attention: [** ]
Phone: [** ]
Facsimile: [** ]
with copies to:
Xxxxxxx, Phleger & Xxxxxxxx LLP
000 Xxxx X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
Attn: [** ]
Phone: [** ]
Facsimile: [** ]
The Purchaser:
INAMED Corporation
00 Xxxx Xxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: [** ]
Phone: [** ]
Facsimile: [** ]
6.8 Finder's Fee. Each party represents that it neither is nor will be
------------
obligated for any finders' fee or commission in connection with this
transaction. Each party agrees to indemnify and hold harmless the other party
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which the party or any of its officers, partners,
employees or representatives is responsible.
6.9 Expenses. Irrespective of whether the Closing is effected, each party
--------
shall bear its own costs with respect to the negotiation, execution, delivery
and performance of this
14
Agreement. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
6.10 Amendments and Waivers. Except as specified in Section 4.9, any term
----------------------
of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and Purchaser. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each Holder of any securities purchased under
this Agreement at the time outstanding (including securities into which such
securities are convertible), each future holder of all such securities, and the
Company; provided, however, that no condition set forth in Section 5 hereof may
be waived, unless the Company consents thereto.
6.11 Severability. If one or more provisions of this Agreement are held to
------------
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first above written.
ADVANCED TISSUE SCIENCES, INC. INAMED CORPORATION
By: /s Xxxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxx
--------------------------- --------------------------------
Title: Chairman & CEO Title: President & Co-CEO
------------------------ ------------------------------
15
EXHIBIT A
Schedule of Exceptions
Section 2.9, List of Subsidiaries:
ATS Orthopedics, Inc.
ATS Dermagraft, Inc.
Dermagraft Joint Venture (a general partnership)
DermEquip, L.L.C.
Neocyte Joint Venture (a general partnership
Segenix, Inc.
