Document:

Exhibit 4.5

 

RIGHT OF FIRST NEGOTIATION AGREEMENT

 

This Right of First Negotiation Agreement (the “Agreement”) is entered into effective as of February 3, 2010 (the “Effective Date”) by and between Anterios, Inc., a Delaware corporation, with offices located at 142 West 57th Street, Suite 4A, New York, New York 10019 (“Anterios”) and Pacific Corporation, a Korean corporation, with offices located at 175-2, 2ga Hangang-ro Yongsan-Gu, Seoul, Korea 140-871 (“Pacific”)

 

RECITALS

 

A,                                    Concurrently with entering into this Agreement, Anterios and Pacific are entering into a Series B-2 Preferred Stock Purchase Agreement (the “Stock Purchase Agreement”), an Amendment to Investors’ Rights Agreement (as defined in the Stock Purchase Agreement) and an Amendment to Right of First Refusal and Co-Sale Agreement and Voting Agreement (as defined in the Stock Purchase Agreement) (collectively, the Stock Purchase Agreement and such Amendments are referred to as the “Investment Documents”);

 

B.                                    As part of the consideration for the purchase of Series B-2 Preferred Stock of Anterios by Pacific covered by the Investment Documents, Anterios wishes to grant Pacific certain rights to negotiate for a license to develop and commercialize Anterios’ Product (as defined below) in the Field (as defined below) in the Territory (as defined below) in accordance with the terms of this Agreement; and

 

C.                                    Pacific wishes to obtain such rights of negotiation in accordance with the terms of this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt an sufficiency of which are hereby acknowledged, Anterios and Pacific agree as follows:

 

1.                                      Definitions

 

1.1.                       “Affiliate” means any company, partnership or other entity that directly or indirectly controls, is controlled by or is under common control with the Party in question. For the purposes of this definition, the term “control” means the ownership of fifty percent (50%) or more of the equity of such company, partnership or other entity or the power to direct the policies and management of such company, partnership or other entity, including without limitation the ability to appoint directors.

 

1.2.                       “Confidential Information” has the meaning set forth in Section 4.1.

 

1.3.                       “Covered Stock” means the Shares (as defined in the Stock Purchase Agreement), and any and all other shares of the capital stock of Anterios that may be

 

 

acquired by Pacific pursuant to any conversion, exchange, stock dividend, split, combination or other recapitalization in connection with or affecting the Covered Stock occurring after the date of this Agreement.

 

1.4.                       “Field” means all uses in humans.

 

1.5.                       “Investment Documents” has the meaning set forth in the Recitals.

 

1.6.                       “Negotiation Period” has the meaning set forth in Section 2.2.

 

1.7.                       “Option” has the meaning set forth in Section 2.1.

 

1.8. “Option Period” means the four (4) month period commencing on the provision by Anterios to Pacific of summary data on the primary endpoints for the first clinical trial of the Product for the indication of wrinkles being conducted as of the Effective Date and/or to be conducted by Anterios under an investigational new drug application (IND) filed with the United States Food and Drug Administration.

 

1.9,                       “Parties” means, collectively, Anterios and Pacific.

 

1.10. “Party” means, individually, Anterios or Pacific.

 

1.11. “Product” means Anterios’ topical emulsion liniment containing botulinum known as “1207,” which is the name designation given the product when submitted in the investigational new drug application (IND) filed with the United States Food and Drug Administration regarding that product.

 

1.12. “Strategic Product Transaction” has the meaning set forth in Section 2.6.

 

1.13. “Territory” means the Republic of Korea. For avoidance of doubt, the Territory does not include the Democratic People’s Republic of Korea.

 

1.14. “Third Party” means any person or entity other than the Parties or their Affiliates.

 

2.                                           Option and Right to Negotiate — Product Development and Commercialization

 

2,1.                            Option. Subject to Sections 2.6, 2.7 and 2.8, during the Option Period, Pacific will have the sole and exclusive right to negotiate an exclusive license under intellectual property owned or controlled by Anterios to develop and commercialize, but not to manufacture or have manufactured, the Product in the Field in the Territory (the “Option”).

 

2.2.                            Exercise of Option. Subject to Sections 2.6, 2.7 and 2.8, Pacific may exercise the Option at any time during the Option Period by providing to Anterios written

 

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notice of exercise of the Option. Upon such exercise, the Parties will exclusively negotiate in good faith for up to two (2) months (the “Negotiation Period”) in order to enter into a definitive exclusive license agreement granting Pacific an exclusive license under intellectual property owned or controlled by Anterios to develop and commercialize, but not to manufacture or have manufactured, the Product in the Field in the Territory. Such license agreement will be subject to all applicable laws including, but not limited to, United States export laws, and will contain such terms as each of the Parties may agree in writing.

 

2.3.                            Expiration of Option. If (a) Pacific informs Anterios in writing that it does not wish to exercise the Option, (b) Pacific fails to exercise the Option within the Option Period, or (c) Pacific exercises the Option but, despite good-faith negotiations, Anterios and Pacific are unable enter into a definitive exclusive license agreement as described in Section 2.2 by the end of the Negotiation Period then, except as expressly provided in Sections 2.5 and 2.6, Anterios shall have no further obligations under Section 2 and will be free to use or dispose of the Product and all of its intellectual property as it sees fit.

 

2.4.                            No Conflicting License. Subject to Sections 2.6, 2.7 and 2.8, until the earliest to occur of one of the events described in Section 2.3, Anterios shall not enter into or attempt to enter into any agreement that would prevent Anterios from granting to Pacific an exclusive license as described in Section 2.2.

 

2.5.                            Limit on Anterios’ Rights After Expiration of Option. Except for the case where Anterios has entered into a Strategic Product Transaction, if Pacific exercises the Option but the Parties fail to enter into a definitive exclusive license agreement as described in Section 2.2, then, for one (1) year after the expiration of the Negotiation Period, Anterios shall not grant an exclusive license to develop and commercialize the Product in the Field in the Territory to any Third Party on terms and conditions that are, in the aggregate, more favorable to such Third Party than the final terms offered by Anterios to Pacific without first offering the same terms in writing to Pacific. If Anterios offers such terms to Pacific, then Pacific must inform Anterios of its acceptance or rejection of such terms within one (1) month after its receipt of the notice from Anterios. If Pacific accepts such terms within such one (1) month period, then the Parties will promptly enter into an exclusive license agreement on such accepted terms. If Pacific rejects such terms or fails to accept such terms within such one (1) month period, then during the one (1) year period after the expiration of the Negotiation Period, Anterios may grant an exclusive license to such Third Party on such terms and conditions as Anterios and such Third Party may agree; provided that such terms shall not be, in the aggregate, more favorable to such Third Party than the final terms offered by Anterios to Pacific. After the expiration of such one (1) year period, Anterios shall have no further obligations under this Agreement and will be free to use or dispose of the Product and all of its intellectual property as it sees fit.

 

2.6.                            Anterios’ Other Rights. Nothing in this Agreement shall prevent or limit Anterios’ ability to consummate any transaction (or series of transactions) in which (a) a Third Party acquires any portion or all of the outstanding capital stock of Anterios, (b) a

 

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Third Party acquires all or substantially all of the assets of Anterios, or (c) a Third Party acquires and/or licenses all or substantially all of the assets of Anterios directly related to the development or commercialization of the Product in any field greater than the Field and/or in any territory greater than the Territory that includes the United States, the European Union and/or Japan, except that, subject to Sections 2.7 and 2.8, if Anterios enters into any such transaction described in clauses (b) and (c) above (each a “Strategic  Product Transaction”) with a Third Party prior to the expiration of the Option Period, then Anterios must provide that such Third Party acquirer’s or licensee’s rights are subject to Pacific’s rights set forth in Sections 2.1 through 2.5 as evidenced in written and signed agreements. For clarity, the Parties acknowledge that Anterios’ obligations under this Agreement would not terminate in the event of any transaction described in clause (a) above, and Anterios would remain obligated to Pacific under this Agreement. Except as expressly stated in this Section 2, nothing in this Agreement limits Anterios’ rights with regard to any of its intellectual property, Product or other assets either within or outside the Territory or within or outside the Field.

 

2.7. Breach By Third Party Acquirer or Licensee. Subject to Section 2.8, if Pacific exercises the Option during the Option Period at any time after Anterios has entered into a Strategic Product Transaction with a Third Party, and if (a) such Strategic Product Transaction is not deemed a Deemed Liquidation Event (as defined in Anterios’ amended and restated certificate of incorporation), and (b) such Third Party acquirer or licensee in a Strategic Product Transaction, in breach of Sections 2.2 through 2.4, does not negotiate in good faith with Pacific an exclusive license as described in Sections 2.2 through 2.4, or refuses in writing to negotiate with Pacific as so required, then, upon written request from Pacific, Anterios shall redeem from Pacific all of the Covered Stock in exchange for an aggregate payment of three million U.S. dollars (US$3,000,000.00), less any applicable tax withholding. The Parties agree that (i) the damages suffered by Pacific as a result of a breach by a Third Party as described in this Section 2.7 would be difficult to quantify, (ii) such redemption and payment constitutes a reasonable estimate of such damages and of the value of the Covered Stock, (iii) such redemption and payment constitutes liquidated damages (and not a penalty), and (iv) such redemption and payment constitutes Pacific’s sole remedy against Anterios and such Third Party for any and all damages caused by such breach by such Third Party. For clarity, from and after such redemption and payment, neither Anterios nor any such Third Party shall have any further obligations under Section 2 and will be free to use or dispose of the Product and all of its intellectual property as it sees fit.

 

2.8. Early Termination of Option. At any time within three (3) years after the Effective Date, Anterios may offer in writing to redeem all of the Covered Stock in exchange for an aggregate payment of three million U.S. dollars (US$3,000,000.00), less any applicable tax withholding. For clarity, this right may be exercised by Anterios for any reason and without regard to the fair market value at the time such right is exercised of the Covered Stock or of the rights of Pacific under this Agreement. Within ten (10) days after notice of such offer is given, Pacific shall notify Anterios in writing whether it accepts such offer of redemption. Notwithstanding anything to the contrary in this Agreement, all of Pacific’s rights under this Section 2 will terminate automatically if

 

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Anterios redeems the Covered Stock pursuant to this Section 2.8, or if Pacific declines (or otherwise fails to accept in writing) Anterios’ offer of redemption made pursuant to this Section 2.8.

 

2.9.                            Agreement to Lock-Up. Pacific hereby agrees that it will not, from the Effective Date until the earliest to occur of (i) the end of the Option Period, (ii) the early termination of Pacific’s rights under this Section 2 pursuant to Section 2.7 or 2.8, or (iii) the execution of an exclusive license as described in Section 2.2, (a) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Covered Stock held by Pacific or (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Covered Stock, whether any such transaction described in clause (a) or (b) above is to be settled by delivery of Covered Stock or other securities, in cash or otherwise. The foregoing provisions of this Section 2.9 shall not apply to the sale of any shares to Anterios pursuant to this Agreement. Pacific further agrees to execute such agreements as may be reasonably requested by Anterios that are consistent with this Section 2.9 or that are necessary to give further effect to this Section 2.9. Any proposed transaction described in clause (a) or (b) above not made in compliance with the requirements of this Agreement shall be null and void ab initio, shall not be recorded on the books of Anterios or its transfer agent and shall not be recognized by Anterios. Pacific acknowledges and agrees that any breach of this Agreement would result in substantial harm to Anterios for which monetary damages alone could not adequately compensate. Therefore, Pacific unconditionally and irrevocably agree that Anterios shall be entitled to seek protective orders, injunctive relief and other remedies available at law or in equity (including, without limitation, seeking specific performance or the rescission of purchases, sales and other transfers of Covered Stock not made in strict compliance with this Agreement).

 

3.                                      Representations, Warranties and Covenants.

 

3.1.                            Representations and Warranties. Each Party represents, warrants and covenants to the other that:

 

(a)                                 Corporate Existence and Power. It is a company, corporation or other entity duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, and has full corporate power and authority and the legal right to own and operate its property and assets and to carry on its business as it is now being conducted and as contemplated in this Agreement.

 

(b)                                 Authority and Binding Agreement. It has the corporate power and authority and the legal right to enter into this Agreement and perform its obligations hereunder; it has taken all necessary corporate action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder; and this Agreement has been duly

 

 

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executed and delivered on behalf of such Party, and constitutes a legal, valid and binding obligation of such Party that is enforceable against it in accordance with its terms.

 

3.2. Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.

 

4.                                      Confidentiality

 

4.1.                            Definition of Confidential Information. As used in this Agreement, “Confidential Information” means any scientific, technical, trade or business information which is given by one Party to the other and which is treated by the disclosing Party as confidential or proprietary. The disclosing Party will, to the extent practical, use reasonable efforts to label or identify as confidential, at the time of disclosure, all such Confidential Information that is disclosed orally or in writing or other tangible form.

 

4.2.                            Obligations. Each Party agrees (a) to keep confidential the Confidential Information of the other Party, (b) not to disclose the other Party’s Confidential Information to any Third Party without the prior written consent of such other Party, and (c) to use such Confidential Information only as necessary to fulfill its obligations or in the reasonable exercise of rights granted to it under this Agreement; provided, however, that the foregoing obligations shall not apply to Confidential Information that (i) is in possession of the receiving Party at the time of disclosure, as reasonably demonstrated by written records and without obligation of confidentiality, (ii) is at the time of disclosure, or later becomes, part of the public domain through no fault of the receiving Party, (iii) is received by the receiving Party from a Third Party without obligation of confidentiality, or (iv) is developed independently by the receiving Party without use of, reference to, or reliance upon the disclosing Party’s Confidential Information by individuals who did not have access to Confidential Information. Notwithstanding the foregoing, a Party may disclose (y) Confidential Information of the other Party to its Affiliates, and to its and their directors, employees, consultants, and agents in each case who have a specific need to know such Confidential Information and who are bound by a like obligation of confidentiality and restriction on use, and (z) Confidential Information of the other Party to the extent such disclosure is required to comply with applicable law or the rules of any stock exchange or listing entity, or to defend or prosecute litigation; provided, however, that the receiving Party provides prior written notice of such disclosure to the disclosing Party and takes reasonable and lawful actions to avoid or minimize the degree of such disclosure. Moreover, Anterios may disclose Confidential Information of Pacific to entities with whom Anterios has (or may have) a marketing and/or development collaboration or to bona fide actual or prospective underwriters, investors, lenders or other financing sources or to potential acquirers of the business to which this Agreement relates; and who in each case have a specific need to know such Confidential Information, in each case who-are bound by a like obligation of confidentiality and restrictions on use.

 

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4,3.                                 Publicity. Except to the extent required by applicable law, neither Party will make any public statements or releases concerning this Agreement or the transactions contemplated by this Agreement, or use the other Party’s name in any form of advertising, promotion or publicity, without obtaining the prior written consent of the other Party.

 

5.                                      Miscellaneous

 

5.1.                                 Legend. Each certificate representing shares of Covered Stock held by Pacific or issued to any permitted transferee shall be endorsed with the following legend:

 

THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO, AND IN CERTAIN CASES PROHIBITED BY, THE TERMS AND CONDITIONS OF A CERTAIN RIGHT OF FIRST NEGOTIATION AGREEMENT BY AND AMONG THE STOCKHOLDER, THE CORPORATION AND CERTAIN OTHER HOLDERS OF STOCK OF THE CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION.

 

Pacific agrees that Anterios may instruct its transfer agent to impose transfer restrictions on the shares represented by certificates bearing the legend referred to in this Section 5.1 to enforce the provisions of this Agreement, and Anterios agrees to promptly do so. The legend shall be removed upon termination of this Agreement at the request of the holder.

 

5.2.                                 Notices. All notices must be written and sent to the address identified below or in a subsequent notice. All notices must be given (a) by personal delivery, with receipt acknowledged, (b) by facsimile followed by hard copy delivered by the methods under (c) or (d), (c) by prepaid certified or registered mail, return receipt requested, or (d) by prepaid recognized next business day delivery service. Notices will be effective upon receipt or at a later date stated in the notice.

 

If to Anterios, to:

 

Anterios, Inc.

142 West 57th Street, Suite 4A

New York, New York 10019

Attention: Chief Executive Officer

Facsimile: +1 212 752 3633

 

with a copy to:

 

Faber Daeufer & Rosenberg PC

950 Winter Street, Suite 4500

Waltham, Massachusetts 10514

 

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Attention: Joseph L. Faber

Facsimile: +1 781 795 4747

 

If to Pacific, to:

 

Pacific Corporation

175-2, 2ga Hangang-ro Yongsan-Gu

Seoul, Korea 140-871

Attention: Jale Suh

Facsimile: 82-2-709-5109

 

5.3. Assignment. This Agreement may not be assigned or otherwise transferred by either Party without the prior written consent of the other Party; provided, however, that either Party may, without such consent, but with notice to the other Party, assign this Agreement, in whole or in part, (a) in connection with the transfer or sale of all or substantially all of its assets or the line of business to which this Agreement relates, (b) to a successor entity or acquirer in the event of a merger, consolidation or change of control, or (c) to any Affiliate. In addition to the foregoing, Pacific may not assign or otherwise transfer any of its rights or obligations under this Agreement to any person or entity except an Affiliate unless it has previously transferred, or concurrently transfers, all Anterios stock Pacific then owns or controls to such person or entity. For avoidance of doubt, Pacific may assign or otherwise transfer any of its rights or obligations under this Agreement to an Affiliate of Pacific without transferring all Anterios stock Pacific then owns or controls to such Affiliate as long as, prior to any such assignment or transfer becoming effective, Pacific provides to Anterios a written notice of the proposed assignment or transfer that contains an acknowledgement, signed by authorized representatives of both Pacific and the proposed assignee and in a form reasonably acceptable to Anterios, that Pacific and such assignee are each bound by all the terms of this Agreement including, but not limited to, Sections 2.7 and 2.8 of this Agreement. Any purported assignment in violation of the provisions of this Section 5.3 will be void. Any permitted assignee will assume the rights and obligations of its assignor under this Agreement.

 

5.4. Entire Agreement. This Agreement and the Investment Documents constitute the entire agreement between the Parties with respect to its subject matter and supersede all prior agreements, written or oral, with respect to such subject matter including, but not limited to, the Memorandum of Understanding, Pacific Series B-2 Finance Terms for the Purchase of Preferred Stock in Anterios dated December 22, 2009 between the Parties.

 

5.5. No Modification. This Agreement may be changed only by a writing signed by authorized representatives of both Parties.

 

5.6.                            Severability; Reformation. Each provision in this Agreement is independent and severable from the others, and no provision will be rendered unenforceable because any other provision may be invalid or unenforceable in whole or

 

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in part. If the scope of any restrictive provision in this Agreement is too broad to permit enforcement to its full extent, then such restriction will be reformed to the maximum extent permitted by law.

 

5.7. Governing Law. This Agreement and any controversy arising out of or relating to this Agreement shall be governed by and construed in accordance with the General Corporation Law of the State of Delaware as to matters within the scope thereof, and as to all other matters shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to conflict of law principles that would result in the application of any law other than the law of the State of New York. The application of the United Nations Conventions on Contracts for the International Sale of Goods, the 1974 Convention on the Limitation Period in the International Sale of Goods, and the Protocol amending such 1974 Convention, done at Vienna April 11, 1980, are each expressly excluded from this Agreement. All actions, suits or proceedings arising out of or relating to this Agreement shall be heard and determined in any New York State or federal court sitting in the City of New York, Borough of Manhattan, and the Parties hereby irrevocably submit to the exclusive jurisdiction of such courts in any such action or proceeding and irrevocably waive any defense of an inconvenient forum to the maintenance of any such action or proceeding.

 

5.8.                            Waiver. No waiver of any term, provision or condition of this Agreement in any one or more instances will be deemed to be or construed as a further or continuing waiver of any other term, provision or condition of this Agreement. Any such waiver, extension or amendment must be evidenced by an instrument in writing executed by an officer authorized to execute waivers, extensions or amendments on behalf of the waiving Party.

 

5.9. Headings. This Agreement contains headings only for convenience and the headings do not constitute or form a part of this Agreement, and should not be used in the construction of this Agreement.

 

5.10. No Benefit to Third Parties. The representations, warranties, covenants and agreements set forth in this Agreement are for the sole benefit of the Parties and their successors and permitted assigns, and they will not be construed as conferring any rights on any other persons.

 

5.11. Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument.

 

[Remainder of page left blank intentionally]

 

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IN WITNESS WHEREOF, the Parties have entered into this Agreement through their duly authorized representatives, effective as of the Effective Date.

 

	
“Anterios”   
    	
 
    	
“Pacific”
    
	
Anterios, Inc.
    	
 
    	
Pacific   Corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Jon Edelson
    	
 
    	
By:
    	
/s/   Henry K. Choi
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Jon   Edelson
    	
 
    	
Name:
    	
Henry   K. Choi
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
CEO and President
    	
 
    	
Title:
    	
Executive Vice President
    

 

10Exhibit 4.6

 

SERIES B-2 PREFERRED STOCK PURCHASE AGREEMENT

ANTERIOS, INC.

 

 

Exhibit A - SCHEDULE OF PURCHASER

 

Exhibit B - FORM OF CHARTER AMENDMENT TO THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

 

Exhibit C - DISCLOSURE SCHEDULE

 

Exhibit D - FORM OF AMENDMENT TO RIGHT OF FIRST NEGOTIATION AGREEMENT

 

Exhibit E - FORM OF OPINION OF COMPANY COUNSEL

 

 

SERIES B-2 PREFERRED STOCK PURCHASE AGREEMENT

 

THIS SERIES B-2 PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of the 16th day of December, 2010 by and between Anterios, Inc., a Delaware corporation, with offices located at 142 West 57th Street, Suite 4A, New York, New York 10019 (the “Company”) and the investor listed on Exhibit A attached to this Agreement (the “Purchaser”).

 

The parties hereby agree as follows:

 

1.                                      Purchase and Sale of Preferred Stock.

 

1.1                          Sale and Issuance of Series B-2 Preferred Stock.

 

(a)                            The Company shall adopt and file with the Secretary of State of the State of Delaware on or before the Closing (as defined below) the Certificate of Amendment (“Charter Amendment”), in the form of Exhibit B attached to this Agreement, to the Third Amended and Restated Certificate of Incorporation (the “Third Restated Certificate”).

 

(b)                            Subject to the terms and conditions of this Agreement, the Purchaser agrees to purchase at the Closing and the Company agrees to sell and issue to the Purchaser at the Closing that number of shares of the Company’s Series B-2 Preferred Stock, $0.0001 par value per share (the “Series B-2 Preferred Stock”), set forth opposite the Purchaser’s name on Exhibit A, at a purchase price of $10.9990 per share. The shares of Series B-2 Preferred Stock issued to the Purchaser pursuant to this Agreement are referred to in this Agreement as the “Shares”.

 

 1.2                          Closing; Delivery.

 

(a)                            The purchase and sale of the Shares shall take place remotely via the exchange of documents and signatures, at such time and place as the Company and the Purchaser mutually agree upon, orally or in writing (which time and place are designated as the “Closing”).

 

(b)                            At the Closing, the Company shall deliver to the Purchaser a certificate representing the Shares being purchased by such Purchaser at the Closing against payment of the purchase price therefor by wire transfer to a bank account designated by the Company.

 

1.3                               Use of Proceeds. The Company will use the proceeds from the sale of the Shares for product development and other general corporate purposes.

 

 1.4                          Defined Terms Used in this Agreement. In addition to the terms defined above, the following terms used in this Agreement shall be construed to have the meanings set forth or referenced below.

 

“Affiliate” means, with respect to any specified Person, any other Person who or which, directly or indirectly, controls, is controlled by, or is under common control with such

 

 

specified Person, including, without limitation, any partner, officer, director, member or employee of such Person and any venture capital fund now or hereafter existing that is controlled by or under common control with one or more general partners or managing members of, or shares the same management company with, such Person.

 

“Amended and Restated Investors’ Rights Agreement” means that certain Amended and Restated Investors’ Rights Agreement dated as of October 6, 2009, as amended by the Amendment to the Amended and Restated Investors’ Rights Agreement dated as of February 3, 2010 (as amended from time to time), by and among the Company and certain of its stockholders.

 

“Amended and Restated Right of First Refusal and Co-Sale Agreement” means that certain Amended and Restated Right of First Refusal and Co-Sale Agreement dated as of October 6, 2009, as amended by the Amendment to Right of First Refusal and Co-Sale Agreement and Voting Agreement dated as of February 3, 2010 (as amended from time to time), by and among the Company and certain of its stockholders.

 

“Amended and Restated Voting Agreement” means that certain Amended and Restated Voting Agreement dated as of October 6, 2009, as amended by the Amendment to Right of First Refusal and Co-Sale Agreement and Voting Agreement dated as of February 3, 2010 (as amended from time to time), by and among the Company and certain of its stockholders.

 

“Amendment to Right of First Negotiation Agreement” means that certain Amendment to Right of First Negotiation Agreement dated as of February 3, 2010 by and between the Company and the Purchaser, in the form of Exhibit D attached to this Agreement.

 

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

 

“Company Intellectual Property” means all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, trade secrets, licenses, domain names, mask works, information and proprietary rights and processes as are necessary to the conduct of the Company’s business as now conducted and as presently proposed to be conducted.

 

“Key Employee” means Jon Edelson, M.D.

 

“Knowledge,” including the phrase “to the Company’s knowledge,” shall mean the actual knowledge of the Company’s Chief Executive Officer.

 

“Material Adverse Effect” means a material adverse effect on the business, assets (including intangible assets), liabilities, financial condition, property or results of operations of the Company.

 

“Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

 

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“Right of First Negotiation Agreement” means that certain Right of First Negotiation Agreement dated as of February 3, 2010 as amended by that certain Amendment to Right of First Negotiation Agreement dated as of the date of this Agreement (as amended from time to time) by and between the Company and the Purchaser.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Transaction Agreements” means this Agreement and the Amendment to Right of First Negotiation Agreement.

 

2.                                      Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchaser that, except as set forth on the Disclosure Schedule attached as Exhibit C to this Agreement, which shall be delivered by the Company to the Purchaser at the Closing, which exceptions shall be deemed to be part of the representations and warranties made hereunder, the following representations are true and complete as of the date of the Closing. The Disclosure Schedule shall be arranged in sections corresponding to the numbered and lettered sections and subsections contained in this Section 2, and the disclosures in any section or subsection of the Disclosure Schedule shall qualify other sections and subsections in this Section 2 only to the extent it is readily apparent from a reading of the disclosure that such disclosure is applicable to such other sections and subsections.

 

2,1                               Organization, Good Standing, Corporate Power 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 presently conducted and as proposed to be conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect.

 

2.2                               Capitalization, The authorized capital stock of the Company consists, immediately prior to the Closing and prior to the filing of the Charter Amendment, of:

 

(a)                                 12,000,000 shares of common stock, $0.0001 par value per share (the “Common Stock”), 5,899,099 shares of which are issued and outstanding immediately prior to the Closing. All of the outstanding shares of Common Stock have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state securities laws. The Company holds no treasury stock and no shares of Preferred Stock in its treasury.

 

(b)                                 3,802,267 shares of preferred stock (“Preferred Stock”), of which 2,529,425 such shares have been designated Series A Preferred Stock (“Series A Preferred Stock”), 1,136,466 such shares have been designated Series B Preferred Stock (“Series B Preferred Stock”), and 136,376 such shares have been designated. Series 13-2 Preferred Stock (“Series B-2 Preferred Stock”). Of the Series A Preferred Stock, 2,529,421 shares are issued and outstanding immediately prior to the Closing, of the Series 13 Preferred Stock, 883,937 are issued or outstanding immediately prior to the Closing, and of the Series B-2 Preferred Stock 136,376 are issued or outstanding immediately prior to the Closing. The rights, privileges and

 

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preferences of the Preferred Stock are as stated in the Third Restated Certificate, as amended, and as provided by the general corporation law of the jurisdiction of the Company’s incorporation.

 

(c)                             The Company has reserved 1,037,882 shares of Common Stock for issuance to officers, directors, employees and consultants of the Company pursuant to its 2006 Stock Plan duly adopted by the Board of Directors and approved by the Company stockholders (the “Stock Plan”). Of such reserved shares of Common Stock, 369,700 shares have been issued pursuant to restricted stock purchase agreements, options and warrants to purchase 472,677 shares have been granted and are currently outstanding, and 195,505 shares of Common Stock remain available for issuance to officers, directors, employees and consultants pursuant to the Stock Plan, The Company has furnished or made available to the Purchaser complete and accurate copies of the Stock Plan and forms of agreements used thereunder.

 

(d)                            Section 2.2(c) of the Disclosure Schedule sets forth the capitalization of the Company immediately following the Closing including the number of shares of the following: (i) issued and outstanding Common Stock, including, with respect to restricted Common Stock, vesting schedule and repurchase price; (ii) issued stock options, including vesting schedule and exercise price; (iii) stock options not yet issued but reserved for issuance; (iv) each series of Preferred Stock; and (v) warrants or stock purchase rights, if any. Except for (A) the conversion privileges of the Preferred Stock, including but not limited to the Shares to be issued under this Agreement, (B) the rights provided in Section 4 of the Amended and Restated Investors’ Rights Agreement, and (C) the securities and rights described in Section 2.2(c) of this Agreement and Section 2.2(d) of the Disclosure Schedule, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal or similar rights) or agreements, orally or in writing, to purchase or acquire from the Company any shares of Common Stock, Series A Preferred Stock, Series B Preferred Stock or Series B-2 Preferred Stock, or any securities convertible into or exchangeable for shares of Common Stock, Series A Preferred Stock, Series B Preferred Stock or Series B-2 Preferred Stock.

 

(e)                             Except as set forth in Section 2.2(d) of the Disclosure Schedule, none of the Company’s stock purchase agreements or stock option documents contains a provision for acceleration of vesting (or lapse of a repurchase right) or other changes in the vesting provisions or other terms of such agreement or understanding upon the occurrence of any event or combination of events. The Company has never adjusted or amended the exercise price of any stock options previously awarded, whether through amendment, cancellation, replacement grant, repricing, or any other means. Except as set forth in the Third Restated Certificate, as amended, and the Right of First Negotiation Agreement, the Company has no obligation (contingent or otherwise) to purchase or redeem any of its capital stock.

 

(f)                              409A. No stock options, stock appreciation rights or other equity-based awards issued or granted by the Company are subject to the requirements of Section 409A of the Code.

 

2.3                          Subsidiaries. The Company does not currently own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture, limited liability

 

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company, association, or other business entity. The Company is not a participant in any joint venture, partnership or similar arrangement.

 

2.4                          Authorization. All corporate action required to be taken by the Company’s Board of Directors and stockholders in order to authorize the Company to enter into the Transaction Agreements, and to issue the Shares at the Closing and the Common Stock issuable upon conversion of the Shares, has been taken or will be taken prior to the Closing. All action on the part of the officers of the Company necessary for the execution and delivery of the Transaction Agreements, the performance of all obligations of the Company under the Transaction Agreements to be performed as of the Closing, and the issuance and delivery of the Shares has been taken or will be taken prior to the Closing. The Transaction Agreements, when executed and delivered by the Company, shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, or (iii) to the extent the indemnification provisions contained in the Amended and Restated Investors’ Rights Agreement may be limited by applicable federal or state securities laws.

 

2.5                          Valid Issuance of Shares. The Shares, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under the Transaction Agreements, applicable state and federal securities laws and liens or encumbrances created by or imposed by a Purchaser. Assuming the accuracy of the representations of the Purchaser in Section 3 of this Agreement and subject to the filings described in Section 2.6(ii) below, the Shares will be issued in compliance with all applicable federal and state securities laws. The Common Stock issuable upon conversion of the Shares has been duly reserved for issuance, and upon issuance in accordance with the terms of the Third Restated Certificate, as amended, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under the Transaction Agreements, applicable federal and state securities laws and liens or encumbrances created by or imposed by a Purchaser. Based in part upon the representations of the Purchaser in Section 3 of this Agreement, and subject to Section 2.6 below, the Common Stock issuable upon conversion of the Shares will be issued in compliance with all applicable federal and state securities laws.

 

2.6                          Governmental Consents and Filings. Assuming the accuracy of the representations made by the Purchaser in Section 3 of this Agreement, no .consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority is required on the part of the Company in connection with the consummation of the transactions contemplated by this Agreement, except for (i) the filing of the Charter Amendment, which will have been filed as of the Closing, and (ii) filings pursuant to Regulation D of the Securities Act, and applicable state securities laws, which have been made or will be made in a timely manner.

 

2.7                          Litigation. There is no claim, action, suit, proceeding, arbitration, complaint, charge or investigation pending or to the Company’s knowledge, currently threatened

 

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(i) against the Company or any officer, director or Key Employee of the Company; or (ii) that questions the validity of the Transaction Agreements or the right of the Company to enter into them, or to consummate the transactions contemplated by the Transaction Agreements. Neither the Company nor, to the Company’s knowledge, any of its officers, directors or Key Employees is a party or is named as subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. There is no action, suit, proceeding or investigation by the Company pending or which the Company intends to initiate. The foregoing includes, without limitation, actions, suits, proceedings or investigations pending or threatened in writing (or any basis therefor known to the Company) involving the prior employment of any of the Company’s employees, their services provided in connection with the Company’s business, or any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers.

 

2.8                          Intellectual Property. Except as set forth in Section 2.8 of the Disclosure Schedule, the Company owns or possesses sufficient legal rights to, without payment or royalty obligations to a third party, all Company Intellectual Property without any known conflict with, or infringement of, the rights of others. To the Company’s knowledge and the knowledge of Klaus Theobald and Bake Zhang, no product or service marketed or sold (or proposed to be marketed or sold) by the Company violates or will violate any license or infringes or will infringe any intellectual property rights of any other party. Other than with respect to commercially available software products under standard end-user object code license agreements, there are no outstanding options, licenses, agreements, claims, encumbrances or shared ownership interests of any kind relating to the Company Intellectual Property, nor is the Company bound by or a party to any options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, proprietary rights and processes of any other Person. The Company has not received any communications alleging that the Company has violated or, by conducting its business, would violate any of the patents, trademarks, service marks, tradenames, copyrights, trade secrets, mask works or other proprietary rights or processes of any other Person. The Company has obtained and possesses valid licenses to use all of the software programs present on the computers and other software-enabled electronic devices that it owns or leases or that it has otherwise provided to its employees for their use in connection with the Company’s business. To the Company’s knowledge and the knowledge of Klaus Theobald and Boke Zhang, it will not be necessary to use any inventions of any of its employees or consultants (or Persons it currently intends to hire) made prior to their employment by the Company. Each employee and consultant has assigned to the Company all intellectual property rights he or she owns that are related to the Company’s business as now conducted and as presently proposed to be conducted, Section 2.8 of the Disclosure Schedule lists all Company Intellectual Property. The Company has not embedded any open source or community source code in any of its products generally available or in development, including but not limited to any libraries or code licensed under any General Public License, Lesser General Public License or similar license arrangement. For purposes of this Section 2.8, the Company shall be deemed to have knowledge of a patent right if the Company has actual knowledge or Klaus Theobald or Boke Zhang have actual knowledge of the patent right or would be found to be on notice of such patent right as determined by reference to United States patent laws.

 

b

 

2.9                          Compliance with Other Instruments. The Company is not in violation or default (1) of any provisions of its Third Restated Certificate, as amended, or Bylaws, (ii) of any instrument, judgment, order, writ or decree, (iii) under any note, indenture or mortgage, or (iv) under any lease, agreement, contract or purchase order to which it is a party or by which it is bound that is required to be listed on the Disclosure Schedule, or of any provision of federal or state statute, rule or regulation applicable to the Company, the violation of which would have a Material Adverse Effect. The execution, delivery and performance of the Transaction Agreements and the consummation of the transactions contemplated by the Transaction Agreements will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either (1) a default under any such provision, instrument, judgment, order, writ, decree, contract or agreement, or (ii) an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, forfeiture, or nonrenewal of any material permit or license applicable to the Company.

 

2.10 Agreements: Actions.

 

(a)                            Except for the Transaction Agreements, and as set forth on Section 2.10(a) of the Disclosure Schedule, there are no agreements, understandings, instruments, contracts or proposed transactions to which the Company is a party or by which it is bound that involve (1) obligations (contingent or otherwise) of, or payments to, the Company in excess of $100,000, (ii) the license of any patent, copyright, trademark, trade secret or other proprietary right to or from the Company, (iii) the grant of rights to manufacture, produce, assemble, license, market, or sell its products to any other Person that limit the Company’s exclusive right to develop, manufacture, assemble, distribute, market or sell its products, or (iv) indemnification by the Company with respect to infringements of proprietary rights.

 

(b)                            The Company has not (i) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any indebtedness for money borrowed or incurred any other liabilities (other than with respect to distributions, indebtedness or other obligations incurred in the ordinary course of business since September 30, 2010 or as disclosed in the Company Financial Statements (as defined below) or as set forth in Section 2.10(b) of the Disclosure Schedule) individually in excess of $50,000 or in excess of $150,000 in the aggregate, (iii) made any loans or advances to any Person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. For the purposes of subsections (b) and (c) of this Section 2.10, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person (including Persons the Company has reason to believe are affiliated with each other) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsection.

 

(c)                             The Company is not a guarantor or indemnitor of any indebtedness of any other Person.

 

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2.11 Certain Transactions.

 

(a)                            Other than (i) standard employee benefits generally made available to all employees, (ii) standard director and officer indemnification agreements approved by the Board of Directors, and (iii) the purchase of shares of the Company’s capital stock and the issuance of options to purchase shares of the Company’s Common Stock, in each instance, approved in the written minutes of the Board of Directors, there are no agreements, understandings or proposed transactions between the Company and any of its officers, directors, consultants or Key Employees, or any Affiliate thereof.

 

(b)                            The Company is not indebted, directly or indirectly, to any of its directors, officers or employees or to their respective spouses or children or to any Affiliate of any of the foregoing, other than in connection with expenses or advances of expenses incurred hi the ordinary course of business or employee relocation expenses, which expenses and/or benefits are not in excess of $5,000.00 with respect to any individual, and for other customary employee benefits made generally available to all employees. None of the Company’s directors, officers or employees, or any members of their immediate families, or any Affiliate of the foregoing (i) are, directly or indirectly, indebted to the Company or, (ii) to the Company’s knowledge, have any direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation which competes with the Company except that directors, officers or employees or stockholders of the Company may own stock in (but not exceeding two percent (2%) of the outstanding capital stock of) publicly traded companies that may compete with the Company. None of the Company’s Key Employees or directors or any members of their immediate families or any Affiliate of any of the foregoing are, directly or indirectly, interested in any contract with the Company. None of the directors or officers, or any members of their immediate families, has any material commercial, industrial, banking, consulting, legal, accounting, charitable or familial relationship with any of the Company’s customers, suppliers, service providers, joint venture partners, licensees and competitors.

 

2.12 Rights of Registration and Voting Rights. Except as provided in the Amended and Restated Investors’ Rights Agreement, the Company is not under any obligation to register under the Securities Act any of its currently outstanding securities or any securities issuable upon exercise or conversion of its currently outstanding securities. To the Company’s knowledge, except as set forth in the Amended and Restated Voting Agreement, no stockholder of the Company has entered into any agreements with respect to the voting of capital shares of the Company.

 

2.13 Absence of Liens. The property and assets that the Company owns are free and clear of all mortgages, deeds of trust, liens, loans and encumbrances, except for statutory liens for the payment of current taxes that are not yet delinquent and encumbrances and liens that arise in the ordinary course of business and do not materially impair the Company’s ownership or use of such property or assets. With respect to the property and assets it leases, the Company is in compliance with such leases and, to its knowledge, holds a valid leasehold interest free of any liens, claims or encumbrances other than those of the lessors of such property or assets.

 

2A4 Financial Statements. The Company has delivered to the Purchaser its unaudited financial statements for the fiscal year ended December 31, 2008 and its unaudited

 

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financial statements (including balance sheet, income statement and statement of cash flows) for the six-month period ended September 30, 2010 (collectively, the “Financial Statements”). The Financial Statements fairly present in all material respects the financial condition and operating results of the Company as of the dates, and for the periods, indicated therein. Except as set forth in the Financial Statements, the Company has no material liabilities or obligations, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to September 30, 2010, and (ii) obligations under contracts and commitments incurred in the ordinary course of business. The Financial Statements have been prepared in accordance with generally accepted accounting principles (other than the exclusion of full footnotes) applied on a consistent basis throughout the periods indicated, and in a manner reasonably capable of being audited at a future date. The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with generally accepted accounting principles other than the exclusion of full footnotes. The Company shall provide the Purchaser with annual financial statements for each fiscal year, and financial statements covering the first six-month period of each fiscal year, occurring after the date of this Agreement. This right to receive financial statements is personal to the Purchaser, and may not be assigned to any other party without the express written consent of the Company, which consent may be withheld in the Company’s sole and absolute discretion. The Purchaser agrees to treat the financial statements as confidential information and to take at least those measures that it takes to protect its own confidential information of a similar nature, but in no case less than reasonable care.

 

2.15 Changes. To the Company’s knowledge and the knowledge of Klaus Theobald and Boke Zhang, since September 30, 2010, there have been no events or circumstances of any kind that have had or could reasonably be expected to result in a Material Adverse Effect.

 

2.16 Employee Matters.

 

(a)                            As of the date hereof, the Company employs six (6) full-time employees, zero (0) part-time employees and engages multiple consultants or independent contractors.

 

(b)                            To the Company’s knowledge, none of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would materially interfere with such employee’s ability to promote the interest of the Company or that would conflict with the Company’s business. Neither the execution or delivery of the Transaction Agreements, nor the carrying on of the Company’s business by the employees of the Company, nor the conduct of the Company’s business as now conducted and as presently proposed to be conducted, will, to the Company’s knowledge, conflict with or result in a breach of the terms, conditions, or provisions of, or constitute a default under, any contract, covenant or instrument under which any such employee is now obligated.

 

(c)                             The Company is not delinquent in payments to any of its employees, consultants, or independent contractors for any wages, salaries, commissions, bonuses, or other direct compensation for any service performed for it to the date hereof or amounts required to be reimbursed to such employees, consultants, or independent contractors.

 

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The Company has complied in all material respects with all applicable state and federal equal employment opportunity laws and with other laws related to employment, including those related to wages, hours, worker classification, and collective bargaining. The Company has withheld and paid to the appropriate governmental entity or is holding for payment not yet due to such governmental entity all amounts required to be withheld from employees of the Company and is not liable for any arrears of wages, taxes, penalties, or other sums for failure to comply with any of the foregoing.

 

(d)                            To the Company’s knowledge, no Key Employee intends to terminate employment with, the Company or is otherwise likely to become unavailable to continue as a Key Employee, nor does the Company have a present intention to terminate the employment of any of the foregoing. The employment of each employee of the Company is terminable at the will of the Company. The Company has no policy, practice, plan, or program of paying severance pay or any form of severance compensation in connection with the termination of employment services, except for the Key Employee.

 

(e)                             The Company has not made any representations regarding equity incentives to any officer, employees, director or consultant that arc inconsistent with the share amounts and terms set forth hi the minutes of meetings of the Company’s Board of Directors.

 

(I)                              The Company has made all required contributions and has no liability to any such employee benefit plan, other than liability for health plan continuation coverage described in Part 6 of Title I(B) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and has complied in all material respects with all applicable laws for any such employee benefit plan.

 

(g)                             The Company is not bound by or subject to (and none of its assets or properties is bound by or subject to) any written or oral, express or implied, contract, commitment or arrangement with any labor union, and no labor union has requested or, to the knowledge of the Company, has sought to represent any of the employees, representatives or agents of the Company. There is no strike or other labor dispute involving the Company pending, or to the Company’s knowledge, threatened, which could have a Material Adverse Effect, nor is the Company aware of any labor organization activity involving its employees.

 

(h)                            To the Company’s knowledge, none of the Key Employees or directors of the Company has been (i) subject to voluntary or involuntary petition under the federal bankruptcy laws or any state insolvency law or the appointment of a receiver, fiscal agent or similar officer by a court for his business or property; (ii) convicted in a criminal proceeding or named as a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); (iii) subject to any order, judgment, or decree (not subsequently reversed, suspended, or vacated) of any court of competent jurisdiction permanently or temporarily enjoining him from engaging, or otherwise imposing limits or conditions on his engagement in any securities, investment advisory, banking, insurance, or other type of business or acting as an officer or director of a public company; or (iv) found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated any federal or state securities, commodities, or unfair trade

 

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practices law, which such judgment or finding has not been subsequently reversed, suspended, or vacated.

 

2.17 Tax Returns and Payments. There are no federal, state, county, local or foreign taxes dues and payable by the Company which have not been timely paid. There are no accrued and unpaid federal, state, country, local or foreign taxes of the Company which are due, whether or not assessed or disputed. There have been no examinations or audits of any tax returns or reports by any applicable federal, state, local or foreign governmental agency. The Company has duly and timely filed all federal, state, county, local and foreign tax returns required to have been filed by it and there are in effect no waivers of applicable statutes of limitations with respect to taxes for any year.

 

2.18 Insurance. The Company has general commercial, product liability, fire and casualty insurance policies with coverage customary for companies similarly situated to the Company.

 

2.19 Confidential Information and Invention Assignment Agreements. Each current and former employee, consultant and officer of the Company has executed an agreement with the Company regarding confidentiality and proprietary information substantially in the form or forms delivered to the counsel for the Purchaser (the “Confidential Information Agreements”). No current or former Key Employee, officer or consultant of the Company has excluded works or inventions from his or her assignment of inventions pursuant to such Key Employee’s, officer’s, or consultant’s Confidential Information Agreement. The Company is not aware that any of its Key Employees, officers or consultants is in violation thereof.

 

2.20 Permits. The Company has all franchises, permits, licenses and any similar authority necessary for the conduct of its business, the lack of which could reasonably be expected to have a Material Adverse Effect. The Company is not in default in any material respect under any of such franchises, permits, licenses or other similar authority.

 

2.21 Corporate Documents. The Third Restated Certificate, as amended, and Bylaws of the Company are in the form provided to the Purchaser. The copy of the minute books of the Company provided or made available to the Purchaser contains minutes of all meetings of directors and stockholders and all actions by written consent without a meeting by the directors and stockholders since the date of incorporation and accurately reflects in all material respects all actions by the directors (and any committee of directors) and stockholders with respect to all transactions referred to in such minutes.

 

2.22 83(b) Elections. To the Company’s knowledge, all elections and notices under Section 83(b) of the Code have been or will be timely filed by all individuals who have acquired =Tested shares of the Company’s Common Stock.

 

2.23 Environmental and Safety Laws. Except as could not reasonably be expected to have a Material Adverse Effect, to the best of its knowledge (a) the Company is and has been in material compliance with all Environmental Laws; (b) there has been no release or to the Company’s knowledge threatened release of any pollutant, contaminant or toxic or hazardous material, substance or waste, or petroleum or any fraction thereof, (each a “Hazardous

 

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Substance”) on, upon, into or from any site currently or heretofore owned, leased or otherwise used by the Company; (c) there have been no Hazardous Substances generated by the Company that have been disposed of or come to rest at any site that has been included in any published U.S. federal, state or local “superfund” site list or any other similar list of hazardous or toxic waste sites published by any governmental authority in the United States; and (d) there are no underground storage tanks located on, no polychlorinated biphenyls (“PCBs”) or PCB-containing equipment used or stored on, and no hazardous waste as defined by the Resource Conservation and Recovery Act, as amended, stored on, any site owned or operated by the Company, except for the storage of hazardous waste in compliance with Environmental Laws. The Company has made available to the Purchaser true and complete copies of all material environmental records, reports, notifications, certificates of need, permits, pending permit applications, correspondence, engineering studies, and environmental studies or assessments.

 

For purposes of this Section 2.23, “Environmental Laws” means any law, regulation, or other applicable requirement relating to (a) releases or threatened release of Hazardous Substance; (b) pollution or protection of employee health or safety, public health or the environment; or (e) the manufacture, handling, transport, use, treatment, storage, or disposal of Hazardous Substances.

 

2.24 Disclosure. The Company has made available to the Purchaser all the information reasonably available to the Company that the Purchaser have requested for deciding whether to acquire the Shares. To the Company’s knowledge, no representation or warranty of the Company contained in this Agreement, as qualified by the Disclosure Schedule, and no certificate furnished or to be furnished to the Purchaser at the Closing contains any untrue statement of a material fact, All information regarding the Company’s business that was provided to the Purchaser was prepared in good faith; however, the Company does not warrant that it will achieve any results projected in such information or contained in any other documents or presentations provided to the Purchaser. It is understood that this representation is further qualified by the fact that the Company has not delivered to the Purchaser, and has not been requested to deliver, a private placement or similar memorandum or any written disclosure of the types of information customarily furnished to purchasers of securities.

 

3.                                      Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company that:

 

3.1                          Authorization. The Purchaser has full power and authority to enter into the Transaction Agreements. The Transaction Agreements to which the Purchaser is a party, when executed and delivered by the Purchaser, will constitute valid and legally binding obligations of the Purchaser, enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, or (b) to the extent the indemnification provisions contained in the Amended and Restated Investors’ Rights Agreement may be limited by applicable federal or state securities laws.

 

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3.2                          Purchase Entirely for Own Account. This Agreement is made with the Purchaser in reliance upon the Purchaser’s representation to the Company, which by the Purchaser’s execution of this Agreement, the Purchaser hereby confirms, that the Shares to be acquired by the Purchaser will be acquired for investment for the 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 that the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same, By executing this Agreement, the Purchaser further represents that the Purchaser does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to any of the Shares. The Purchaser has not been formed for the specific purpose of acquiring the Shares.

 

3.3                          Disclosure of Information. The Purchaser has had an opportunity to discuss the Company’s business, management, financial affairs and the terms and conditions of the offering of the Shares with the Company’s management and has had an opportunity to review the Company’s facilities. The foregoing, however, does not limit or modify the representations and warranties of the Company in Section 2 of this Agreement or the right of the Purchaser to rely thereon.

 

3.4                          Restricted Securities. The Purchaser understands that the Shares have not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser’s representations as expressed herein. The Purchaser understands that the Shares are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Purchaser must hold the Shares indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. The Purchaser acknowledges that the Company has no obligation to register or qualify the Shares, or the Common Stock into which it may be converted, for resale except as set forth in the Amended and Restated Investors’ Rights Agreement The Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Shares, and on requirements relating to the Company which are outside of the Purchaser’s control, and which the Company is under no obligation and may not be able to satisfy. Purchaser understands that this offering is not intended to be part of the public offering, and that Purchaser will not be able to rely on the protection of Section 11 of the Securities Act.

 

3.5                          No Public Market. The Purchaser understands that no public market now exists for the Shares, and that the Company has made no assurances that a public market will ever exist for the Shares.

 

3.6                          Legends. The Purchaser understands that the Shares and any securities issued in respect of or exchange for the Shares, may bear one or all of the following legends:

 

(a) “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE

 

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BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGIS’T’RATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

 

(b)                                 Any legend set forth in, or required by, the other Transaction Agreements.

 

(c)                                  Any legend required by the securities laws of any state to the extent such laws are applicable to the Shares represented by the certificate so legended.

 

3.7                          Accredited Investor. The Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act,

 

3.8                          Foreign Investors. If the Purchaser is not a United States person (as defined by Section 7701(a)(30) of the Code), such Purchaser hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Shares or any use of this Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Shares. Such Purchaser’s subscription and payment for and continued beneficial ownership of the Shares will not violate any applicable securities or other laws of the Purchaser’s jurisdiction.

 

3.9                          No General Solicitation. Neither the Purchaser, nor any of its officers, directors, employees, agents, stockholders or partners has either directly or indirectly, including through a broker or finder (a) engaged in any general solicitation, or (b) published any advertisement in connection with the offer and sale of the Shares.

 

3.10 Residence. If the Purchaser is an individual, then the Purchaser resides in the state or province identified in the address of the Purchaser set forth on Exhibit A; if the Purchaser is a partnership, corporation, limited liability company or other entity, then the office or offices of the Purchaser in which its principal place of business is identified in the address or addresses of the Purchaser set forth on Exhibit A.

 

4.                                 Conditions to the Purchaser’s Obligations at Closing. The obligations of the Purchaser to purchase Shares at the Closing are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

 

4.1                               Representations and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct in all material respects as of such Closing, except that any such representations and warranties shall be true and correct in all respects where such representation and warranty is qualified with respect to materiality.

 

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4.2 Performance. The Company shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Company on or before each Closing.

 

4.3                               Compliance Certificate. The Chief Executive Officer of the Company shall deliver to the Purchaser at the Closing a certificate certifying that the conditions specified in Sections 4.1 and 4.2 have been fulfilled.

 

4.4                               Qualifications. All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing.

 

4.5 Amendment to Right of First Negotiation Agreement. The Company and the Purchaser (provided that the Purchaser shall not rely upon this condition to excuse the Purchaser’s performance hereunder) shall have executed and delivered the Amendment to Right of First Negotiation Agreement.

 

4.6                               Charter Amendment. The Company shall have filed the Charter Amendment to the Third Restated Certificate with the Secretary of State of Delaware on or prior to the Closing, which shall continue to be in full force and effect as of the Closing.

 

4.7                               Opinion of Company Counsel. The Purchaser shall have received from Faber Daeufer & Rosenberg PC, counsel for the Company, an opinion, dated as of the date of the Closing, in substantially the form of Exhibit E attached to this Agreement.

 

4.8                               Secretary’s Certificate. The Secretary of the Company shall have delivered to the Purchaser at the Closing a certificate certifying (i) the Bylaws of the Company, (ii) resolutions of the Board of Directors of the Company approving the Transaction Agreements and the transactions contemplated under the Transaction Agreements, and (iii) resolutions of the stockholders of the Company approving the Charter Amendment.

 

4.9                               Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to the Purchaser, and the Purchaser (or its counsel) shall have received all such counterpart original and certified or other copies of such documents as reasonably requested. Such documents may include good standing certificates.

 

5.                                      Conditions of the Company’s Obligations at Closing. The obligations of the Company to sell Shares to the Purchaser at the Closing are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

 

5.1                          Representations and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct in all material respects as of the Closing.

 

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5.2                          Performance. The Purchaser shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by them on or before the Closing.

 

5.3                          Qualifications. All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Share pursuant to this Agreement shall be obtained and effective as of the Closing.

 

5.4                          Amendment to Right of First Negotiation Agreement. The Purchaser shall have executed and delivered the Amendment to Right of First Negotiation Agreement.

 

6.                                      Miscellaneous.

 

6.1                          Survival of Warranties. Unless otherwise set forth in this Agreement, the representations and warranties of the Company and the Purchaser 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 or knowledge of the subject matter thereof made by or on behalf of the Purchaser or the Company.

 

6.2                          Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of, and be binding upon, the respective successors and assigns of the parties. This Agreement may not be assigned by either party without the prior written consent of the other party, provided however that either party may assign all of its rights and obligations under this Agreement in connection with a merger or consolidation of such party, or a sale of substantially all of the assets of such party. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective 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 and any controversy arising out of or relating to this Agreement shall be governed by and construed in accordance with the General Corporation Law of the State of Delaware as to matters within the scope thereof, and as to all other matters shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to conflict of law principles that would result in the application of any law other than the law of the State of New York. All actions, suits or proceedings arising out of or relating to this Agreement shall be heard and determined in any New York State or federal court sitting in the City of New York, Borough of Manhattan, and the Parties hereby irrevocably submit to the exclusive jurisdiction of such courts in any such action or proceeding and irrevocably waive any defense of an inconvenient forum to the maintenance of any such action or proceeding.

 

6.4 Counterparts: Facsimile. This Agreement may be executed and delivered by facsimile signature and 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.

 

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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                               Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent dining normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one business (1) day after deposit with a nationally recognized overnight courier, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page or Exhibit A, or to such e-mail address, facsimile number or address as subsequently modified by written notice given in accordance with this Section 6.6. If notice is given to the Company, a copy shall also be sent to Faber Daeufer & Rosenberg PC, 950 Winter Street, Suite 4500, Waltham, Massachusetts 02451, Attention: Joseph L. Faber, Esq., Facsimile: (781) 795-4747, and if notice is given to the Purchaser, a copy shall also be given to AMOREPACIFIC Corporation, 181, 2ga Hangang-ro Yongsan-Gu, Seoul, Korea 140-777, Attention: B.K. Jang, Facsimile: 82-2-709-5339.

 

6.7                               No Finder’s Fees. Other than as set forth at Section 6.7 of the Disclosure Schedule, each party represents that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction. The Purchaser agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Purchaser or any of its officers, employees, or representatives is responsible. The Company agrees to indemnify and hold harmless the Purchaser from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

 

6.8                               Attorney’s Fees. If any action at law or in equity (including arbitration) is necessary to enforce or interpret the terms of any of the Transaction Agreements, 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.

 

6.9 Amendments and Waivers, Any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and the Purchaser. Any amendment or waiver effected in accordance with this Section 6.9 shall be binding upon the Purchaser and each transferee of the Shares (or the Common Stock issuable upon conversion thereof), each future holder of all such securities, and the Company.

 

6.10 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

 

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6.11 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

 

6.12 Entire Agreement. This Agreement (including the Exhibits hereto), the Third Restated Certificate, as amended, and the other Transaction Agreements constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled.

 

6.13 No Commitment for Additional Financing. The Company acknowledges and agrees that no Purchaser has made any representation, undertaking, commitment or agreement to provide or assist the Company in obtaining any financing, investment or other assistance, other than the purchase of the Shares at the Closing as set forth herein and subject to the conditions set forth herein. In addition, the Company acknowledges and agrees that (i) no statements, whether written or oral, made by any Purchaser or its representatives on or after the date of this Agreement shall create an obligation, commitment or agreement to provide or assist the Company in obtaining any financing or investment, (ii) the Company shall not rely on any such statement by any Purchaser or its representatives and (iii) an obligation, commitment or agreement to provide or assist the Company in obtaining any financing or investment may only be created by a written agreement, signed by such Purchaser and the Company, setting forth the terms and conditions of such financing or investment and stating that the parties intend for such writing to be a binding obligation or agreement. The Purchaser shall have the right, in it sole and absolute discretion, to refuse or decline to participate in any other financing of or investment in the Company, and shall have no obligation to assist or cooperate with the Company in obtaining any financing, investment or other assistance.

 

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IN WITNESS WHEREOF, the parties have executed this Series B-2 Preferred Stock Purchase Agreement as of the date first written above.

 

	
 
    	
 
    	
COMPANY:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ANTERIOS,   INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Jon Edelson
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name: Jon Edelson, MD
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title: President and CEO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address:
    	
142   West 57th Street, Suite 4A
    
	
 
    	
 
    	
 
    	
New   York, New York 10019
    
					

 

SIGNATURE PAGE TO PURCHASE AGREEMENT

 

 

	
 
    	
 
    	
PURCHASER:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
PACIFIC   CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Henry K. Choi
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name: Henry K. Choi
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title: Executive Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address:
    	
175-2,   2ga Hangang-ro Yongsan-Gu
    
	
 
    	
 
    	
 
    	
Seoul,   Korea 140-87

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