Contract analysis

I. Introduction and Purpose of Notice This firm serves as legal counsel to Penterra Pharmaceuticals Corp., a Delaware corporation ("Penterra" or "Buyer"), in connection with the above-referenced Stock Purchase Agreement, dated as of June 10, 2024 (together with all schedules, exhibits, and disclosure letters delivered in connection therewith, the "Agreement"), by and among Buyer, Veridian Biosciences, Inc., a Delawar

II. Background and Recitals On June 10, 2024, Buyer, the Company, the Sellers, and the Stockholder Representative entered into the Agreement, pursuant to which Buyer agreed to acquire one hundred percent (100%) of the issued and outstanding capital stock of the Company (the "Shares") for an aggregate purchase price of Nine Hundred Million Dollars ($900,000,000) in cash (the "Purchase Price"), subject to the customary

III. Basis for Termination — Section 8.1(d) of the Agreement A. Termination Right Under Section 8.1(d)

Section 8.1(d) of the Agreement provides, in relevant part, that: "This Agreement may be terminated and the Transactions may be abandoned at any time prior to the Closing . . . by Buyer, by written notice to the Company and the Stockholder Representative, if any of the conditions to Buyer's obligation to consummate the Closing set forth in Section 7.2 shall have become incapable of being satisfied prior to the Outsid

Section 7.2(a) of the Agreement conditions Buyer's obligation to consummate the Closing upon the representations and warranties of the Company and the Sellers set forth in Article III of the Agreement being true and correct in all respects (or, with respect to representations and warranties not qualified by materiality or Material Adverse Effect, true and correct in all material respects) as of the date of the Agreem

Section 7.2(b) of the Agreement conditions Buyer's obligation to consummate the Closing upon the absence, since the date of the Agreement, of any event, change, development, occurrence, condition, or effect that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect on (a) the business, results of operations, financial condition, or assets of the Company, taken as

IV. Events Constituting the Material Adverse Effect A. Marlowe Asset Management-2 Phase II Clinical Trial Data (August 14, 2024) VRD-4187, the Company's lead clinical product candidate, is a bispecific T-cell engager targeting delta-like ligand 3 ("DLL3")-expressing tumors for the treatment of small cell lung cancer ("SCLC"). VRD-4187 was the subject of the Company's pivotal clinical development program, designated a

V. Inapplicability of MAE Definition Carveouts Buyer has carefully considered whether any of the carveouts set forth in the definition of "Material Adverse Effect" in Section 1.1 of the Agreement could apply to the events described above. Buyer has concluded that none of the carveouts is applicable. The events giving rise to the Material Adverse Effect are, in each case, company-specific in nature. They consist of: (

VI. Incurability Prior to the Outside Date The conditions to Buyer's obligation to consummate the Closing set forth in Sections 7.2(a) and 7.2(b) of the Agreement have become incapable of being satisfied prior to the Outside Date of December 10, 2024. The exercise of Buyer's termination right under Section 8.1(d) is predicated on this incurability, and Buyer sets forth the basis for its determination as follows: (i)

VII. No Breach by Buyer Buyer has at all times since the execution of the Agreement fully complied with each of its representations, warranties, covenants, and agreements under the Agreement, including without limitation its obligations under Section 5.4 (Commercially Reasonable Efforts), Section 5.5 (Regulatory Filings and Approvals), and all other provisions of Article V. Buyer has cooperated in good faith with the

VIII. Prior Notice and Opportunity to Cure Buyer notes that, prior to delivering this Termination Notice, Buyer afforded the Company notice and a reasonable opportunity to cure the failures described herein, consistent with the principles of good faith and fair dealing and the terms of the Agreement. On September 6, 2024, Buyer delivered to the Company a detailed Deficiency Notice (the "Deficiency Notice") identifyin

IX. Termination Effective Date and Consequences Based on the foregoing, the Agreement is hereby terminated effective as of September 30, 2024, in accordance with Section 8.1(d) thereof. Pursuant to Section 8.2 of the Agreement (Effect of Termination), upon termination of the Agreement in accordance with Section 8.1, the Agreement shall become void and of no further force or effect, and no party shall have any further

X. Inapplicability of Reverse Termination Fee Buyer notes that the reverse termination fee provision set forth in Section 8.3(b) of the Agreement, which provides for the payment by Buyer of a reverse termination fee in the amount of Forty-Five Million Dollars ($45,000,000), is triggered solely in the event of a termination of the Agreement resulting from Buyer's failure to consummate the Closing due to a failure or u

XI. Reservation of Rights Buyer expressly reserves all of its rights, remedies, claims, and defenses under the Agreement, at law, and in equity, including without limitation: (a) the right to seek recovery of all damages, costs, and expenses (including reasonable attorneys' fees and expenses) arising from or related to the Company's and the Sellers' breach of representations and warranties and the events described he

XII. Notices Under the Agreement This Termination Notice is delivered in accordance with the notice provisions of Section 10.1 of the Agreement. All notices, requests, demands, claims, and other communications under the Agreement should continue to be directed to Buyer at: Penterra Pharmaceuticals Corp. 1100 Meridian Boulevard, Suite 400 Princeton, New Jersey 08540 Attention: Thomas F. Holbrook, General Counsel With