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NOTE PURCHASE AGREEMENT

Execution Version

Dated as of April 9, 2024

by and among

GENOME DX THERAPEUTICS INC. a Delaware corporation (the "Company")

and

PINNACLE BIOVENTURES FUND III, L.P. a Delaware limited partnership

CORMORANT HEALTH CAPITAL PARTNERS, L.P. a Delaware limited partnership

ALDER CREEK LIFE SCIENCES FUND II, L.P. a Delaware limited partnership

(each, a "Purchaser" and collectively, the "Purchasers")

Aggregate Principal Amount: $40,000,000

Senior Unsecured Convertible Promissory Notes

NOTE PURCHASE AGREEMENT

This NOTE PURCHASE AGREEMENT (this "Agreement") is entered into as of April 9, 2024, by and among Genome Dx Therapeutics Inc., a Delaware corporation (the "Company"), and each of the purchasers identified on the signature pages hereto (each, a "Purchaser" and collectively, the "Purchasers").

RECITALS

WHEREAS, the Company is a clinical-stage biopharmaceutical company duly incorporated and existing under the laws of the State of Delaware, with its principal place of business located at 450 Pinnacle Drive, Suite 300, South San Francisco, California 94080;

WHEREAS, the Company desires to issue and sell, and each Purchaser desires to purchase, senior unsecured convertible promissory notes in the aggregate principal amount of Forty Million Dollars ($40,000,000) (the "Notes"), on the terms and subject to the conditions set forth herein;

WHEREAS, the Notes are being issued and sold in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), afforded by Section 4(a)(2) thereof and Rule 506(b) of Regulation D promulgated thereunder, and each Purchaser is an existing stockholder of the Company and an accredited investor within the meaning of Rule 501(a) of Regulation D;

WHEREAS, the Company intends to use the net proceeds from the sale of the Notes to fund the continuation and expansion of its Phase 2b clinical trial for GDT-4187, a selective CDK9/FLT3 dual kinase inhibitor being developed for the second-line treatment of refractory non-small cell lung cancer, to fund preclinical development activities for GDT-5201, and for general corporate purposes and working capital; and

WHEREAS, the parties hereto desire to set forth the terms and conditions upon which the Notes will be issued, sold, and purchased.

NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations, and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1 — DEFINITIONS

Section 1.1 — Definitions

As used in this Agreement, the following terms shall have the meanings set forth below:

"Alder Creek" means Alder Creek Life Sciences Fund II, L.P., a Delaware limited partnership, with its principal office at 555 Mission Street, Suite 2800, San Francisco, California 94105.

"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person. For purposes of this definition, "control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.

"Agreement" means this Note Purchase Agreement, as it may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.

"Board" means the Board of Directors of the Company.

"Business Day" means any day other than a Saturday, Sunday, or any day on which banking institutions in San Francisco, California or Wilmington, Delaware are authorized or obligated by applicable law or executive order to close.

"Change of Control" means (a) any merger, consolidation, or other business combination transaction involving the Company in which the holders of the Company's capital stock immediately prior to such transaction hold, immediately following such transaction, less than fifty percent (50%) of the voting power of the surviving or resulting entity (or the direct or indirect parent entity of such surviving or resulting entity, if applicable); (b) the sale, lease, transfer, exclusive license, or other disposition, in a single transaction or a series of related transactions, of all or substantially all of the assets of the Company; or (c) any transaction or series of related transactions (including any reorganization, recapitalization, stock purchase, or other similar transaction) resulting in any Person or "group" (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) acquiring beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of more than fifty percent (50%) of the outstanding voting securities of the Company.

"Change of Control Premium" has the meaning set forth in Section 3.1(c).

"Closing" means the closing of the purchase and sale of the Notes pursuant to Section 2.2 hereof.

"Closing Date" means April 12, 2024, or such other date as the Company and the Purchasers may mutually agree in writing.

"Common Stock" means the Common Stock, par value $0.0001 per share, of the Company.

"Company" means Genome Dx Therapeutics Inc., a Delaware corporation.

"Conversion Price" has the meaning set forth in Section 3.1(a).

"Conversion Shares" means the shares of capital stock of the Company issuable upon conversion of the Notes in accordance with Section 3.1 hereof.

"Cormorant" means Cormorant Health Capital Partners, L.P., a Delaware limited partnership, with its principal office at 375 Park Avenue, Suite 3201, New York, New York 10152.

"discounted Price" has the meaning set forth in Section 3.1(a).

"Disclosure Schedules" means the disclosure schedules delivered by the Company to the Purchasers concurrently with the execution of this Agreement, as set forth in Schedule 4 hereto.

"Enforceability Exceptions" means the limitations on enforceability imposed by (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or similar laws of general applicability affecting the enforcement of creditors' rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

"Equity Incentive Plan" means the Company's 2018 Equity Incentive Plan, as amended from time to time.

"Escrow Agent" means Meridian Pacific Bank, N.A., a national banking association, with its principal office at 350 Sansome Street, 12th Floor, San Francisco, California 94104.

"Escrow Agreement" means the Escrow Agreement to be entered into among the Company, the Purchasers, and the Escrow Agent in connection with the Closing, in form and substance reasonably satisfactory to the parties thereto.

"Event of Default" has the meaning set forth in Section 3.6.

"Fully Diluted Capitalization" means, as of immediately prior to the Closing, 48,250,000 shares, consisting of all outstanding shares of Common Stock, all outstanding shares of Preferred Stock (calculated on an as-converted-to-Common Stock basis), and all shares of Common Stock issuable upon the exercise of all outstanding options, warrants, and other convertible securities of the Company (whether or not vested or currently exercisable), in each case calculated without giving effect to the issuance of the Notes or the Conversion Shares.

"GAAP" means United States generally accepted accounting principles, consistently applied throughout the periods involved.

"Governmental Authority" means any federal, state, local, or foreign government or political subdivision thereof, or any agency, authority, bureau, commission, department, instrumentality, or regulatory body thereof, or any court, tribunal, or arbitrator.

"Knowledge" or "knowledge" means, with respect to the Company, the actual knowledge, after reasonable inquiry, of Dr. Marcus Avellino (Chief Executive Officer), Diane Kowalski (Chief Financial Officer), and Priya Raghunathan (General Counsel & Corporate Secretary).

"Majority Holders" means, at any time, the holders of Notes representing more than fifty percent (50%) of the aggregate outstanding principal amount of all Notes then outstanding. For the avoidance of doubt, as of the Closing, the threshold for Majority Holders is $20,000,001 of aggregate outstanding principal.

"Material Adverse Effect" means any event, circumstance, change, or effect that, individually or in the aggregate with all other events, circumstances, changes, or effects, has had or would reasonably be expected to have a material adverse effect on (a) the business, assets, liabilities, financial condition, or results of operations of the Company, taken as a whole, or (b) the ability of the Company to perform its obligations under the Transaction Documents in any material respect; provided, however, that none of the following shall constitute or be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur: (i) changes in general economic, financial, or market conditions (including changes in prevailing interest rates, credit availability, currency exchange rates, or price levels or trading volumes in the United States or foreign securities markets); (ii) changes or conditions generally affecting the biopharmaceutical industry and not disproportionately affecting the Company relative to other participants in the biopharmaceutical industry; (iii) changes in applicable law, regulation, or GAAP or the interpretation or enforcement thereof after the date hereof; or (iv) the public announcement or pendency of the transactions contemplated by this Agreement.

"Maturity Date" means April 12, 2027, which is thirty-six (36) months from the Closing Date.

"MFN Period" means the period commencing on the Closing Date and ending on the date that is twelve (12) months after the Closing Date.

"Notes" means the senior unsecured convertible promissory notes issued by the Company pursuant to this Agreement, substantially in the form attached hereto as Exhibit A, as the same may be amended, restated, or otherwise modified from time to time in accordance with the terms thereof and hereof.

"Paying Agent" means Meridian Pacific Bank, N.A., in its capacity as paying agent for the Notes, or any qualified successor paying agent appointed in accordance with Section 7.7.

"Permitted Liens" means (a) statutory liens for taxes, assessments, or other governmental charges not yet due and payable or being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP; (b) mechanics', carriers', workers', repairers', and other similar liens arising or incurred in the ordinary course of business relating to obligations that are not overdue for a period of more than sixty (60) days or that are being contested in good faith by appropriate proceedings; and (c) liens on equipment acquired in the ordinary course of business securing purchase money indebtedness not exceeding $500,000 individually or $1,000,000 in the aggregate.

"Person" means any individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, Governmental Authority, or any other entity.

"PIK" or "Paid-in-Kind" has the meaning set forth in Section 3.2.

"Pinnacle" means Pinnacle BioVentures Fund III, L.P., a Delaware limited partnership, with its principal office at 101 Federal Street, 26th Floor, Boston, Massachusetts 02110.

"Preferred Stock" means, collectively, the Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock of the Company.

"Purchase Price" means, with respect to each Purchaser, the aggregate principal amount of Notes to be purchased by such Purchaser as set forth opposite such Purchaser's name on Schedule 1 hereto.

"Purchasers" means, collectively, Pinnacle, Cormorant, and Alder Creek, and each individually a "Purchaser."

"Qualified Financing" means a bona fide equity financing of the Company occurring after the date hereof in which the Company issues and sells shares of its Preferred Stock (or a newly created series of Preferred Stock) and the aggregate gross proceeds received by the Company therefrom (including, for the avoidance of doubt, the aggregate principal amount of Notes converting in connection therewith, together with all accrued and unpaid interest thereon) equal or exceed Fifty Million Dollars ($50,000,000).

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

"Transaction Documents" means this Agreement, the Notes, the Disclosure Schedules, the Escrow Agreement, and each other agreement, certificate, document, and instrument delivered by any party in connection with the transactions contemplated hereby.

"Valuation Cap" means Two Hundred Million Dollars ($200,000,000), representing the pre-money valuation cap applicable to the conversion of the Notes.

"Valuation Cap Price" means an amount equal to the Valuation Cap divided by the Fully Diluted Capitalization, which as of the date hereof equals Four Dollars and Fourteen and 51/100 Cents ($4.1451) per share (calculated as $200,000,000 ÷ 48,250,000).

Section 1.2 — Rules of Construction

Unless the context of this Agreement otherwise requires:

(a) References to any Section, Article, Exhibit, or Schedule shall be to the corresponding Section, Article, Exhibit, or Schedule of or to this Agreement, unless otherwise specifically indicated.

(b) The headings and captions of the various Sections, Articles, Exhibits, and Schedules of this Agreement are for convenience of reference only and shall not affect the meaning or interpretation of this Agreement.

(c) The word "including" (and with correlative meaning, "include" and "includes") means including without limiting the generality of any description preceding or succeeding such word, and shall be deemed to be followed by the phrase "without limitation."

(d) The use of the singular form of any word shall include the plural, and the use of the plural form shall include the singular, in each case as the context may require.

(e) References to any gender shall include all genders.

(f) The words "herein," "hereof," "hereto," "hereunder," and similar terms refer to this Agreement as a whole and not to any particular provision of this Agreement.

(g) References to "dollars" or "$" shall mean United States dollars.

(h) References to any agreement, document, or instrument mean such agreement, document, or instrument as amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms, unless otherwise specified.

(i) References to any law, statute, rule, or regulation include any amendment, modification, or replacement thereof and all rules and regulations promulgated thereunder, unless otherwise specified.

(j) The parties have participated jointly in the negotiation and drafting of this Agreement, and in the event of any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

ARTICLE 2 — PURCHASE AND SALE OF NOTES

Section 2.1 — Purchase and Sale

Subject to the terms and conditions of this Agreement, the Company hereby agrees to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, hereby agrees to purchase from the Company, a Note in the principal amount set forth opposite such Purchaser's name on Schedule 1 attached hereto, for an aggregate principal amount of Forty Million Dollars ($40,000,000), allocated among the Purchasers as follows:

The purchase price for each Note shall be equal to one hundred percent (100%) of the principal amount thereof. No original issue discount shall apply to any Note issued hereunder. Each Purchaser's obligation to purchase its Note is several and not joint, and no Purchaser shall be responsible for the failure of any other Purchaser to purchase its Note.

Section 2.2 — Closing

(a) Time and Place. The Closing shall take place on the Closing Date at the offices of Calderwood & Harkness LLP, 600 California Street, 40th Floor, San Francisco, California 94108, or at such other place or by electronic exchange of executed documents and other deliverables, as the Company and the Purchasers may mutually agree in writing. The Closing shall be deemed to have occurred upon the satisfaction or waiver of all conditions to Closing set forth in Article 6 and the delivery of all closing deliverables specified herein.

(b) Closing Deliveries. At the Closing:

(i) Each Purchaser shall deliver to the Escrow Agent (or, if the Escrow Agreement is not then in effect, directly to the Company) the Purchase Price for such Purchaser's Note by wire transfer of immediately available funds in United States dollars in accordance with the wire instructions set forth on Schedule 2 hereto.

(ii) The Company shall deliver to each Purchaser a Note in the principal amount set forth opposite such Purchaser's name on Schedule 1 hereto, duly executed by an authorized officer of the Company.

(iii) The Company shall deliver each of the closing deliverables set forth in Section 6.2 hereof.

(iv) Each Purchaser shall deliver each of the closing deliverables set forth in Section 6.3 hereof.

(c) Escrow. All funds delivered by the Purchasers in connection with the Closing shall be deposited into escrow at Meridian Pacific Bank, N.A., Trust Account No. 7841-0093-22 (the "Escrow Account"), and shall be held, invested, and disbursed in accordance with the terms of the Escrow Agreement. Funds held in the Escrow Account shall be released to the Company's designated operating account promptly upon the satisfaction or waiver of all conditions to Closing set forth in Article 6. In the event that the Closing does not occur on or before the date that is thirty (30) days after the date hereof (or such later date as the Company and the Purchasers may mutually agree in writing), all funds in the Escrow Account shall be promptly returned to the respective Purchasers, without interest (other than any interest earned on such funds while held in escrow, which shall be disbursed to the applicable Purchasers on a pro rata basis).

Section 2.3 — Use of Proceeds

The Company shall use the aggregate net proceeds received from the sale of the Notes as follows:

(a) Approximately Twenty-Eight Million Dollars ($28,000,000) for the continuation and expansion of the Company's Phase 2b clinical trial for GDT-4187, a selective CDK9/FLT3 dual kinase inhibitor being developed by the Company for the second-line treatment of refractory non-small cell lung cancer. As of the date hereof, the Phase 2b clinical trial is being conducted at twenty-two (22) clinical centers across eight (8) states in the United States, with topline data expected in the first quarter of 2025. The proceeds allocated to GDT-4187 are expected to cover clinical trial operating costs, clinical site payments, contract research organization fees, bioanalytical and pharmacokinetic services, data management and statistical analysis, regulatory submissions, and related expenses.

(b) Approximately Seven Million Dollars ($7,000,000) for preclinical development of GDT-5201, the Company's next-generation PROTAC degrader program, including lead optimization, in vitro and in vivo efficacy and toxicology studies, IND-enabling studies, and related research activities.

(c) Approximately Five Million Dollars ($5,000,000) for general corporate purposes and working capital, including but not limited to personnel costs, facility expenses, legal and accounting fees, insurance premiums, and other administrative and operational expenses incurred in the ordinary course of business.

The Company acknowledges that the foregoing represents the Company's current intentions with respect to the use of proceeds and that the actual allocation of proceeds may vary from the estimates set forth above based on the Company's evolving business needs and operational requirements. Notwithstanding the foregoing, the Company shall not materially deviate from the foregoing use of proceeds without the prior written consent of the Majority Holders.

ARTICLE 3 — TERMS OF THE NOTES

Section 3.1 — Conversion

(a) Automatic Conversion Upon Qualified Financing. Upon the closing of a Qualified Financing (i.e., an equity financing in which the aggregate gross proceeds received by the Company, including the aggregate principal amount of Notes converting in connection therewith and all accrued and unpaid interest thereon, equal or exceed Fifty Million Dollars ($50,000,000)), each Note shall automatically convert, without any further action required on the part of the holder thereof or the Company, into fully paid and nonassessable shares of the series of Preferred Stock issued and sold by the Company in such Qualified Financing.

The price per share at which each Note shall convert (the "Conversion Price") shall be the lesser of:

(i) eighty percent (80%) of the per-share price paid by the new cash investors in the Qualified Financing (the "discounted Price"), reflecting a twenty percent (20%) discount to such per-share price; or

(ii) the Valuation Cap Price of Four Dollars and Fourteen and 51/100 Cents ($4.1451) per share, calculated as the Valuation Cap ($200,000,000) divided by the Fully Diluted Capitalization (48,250,000 shares).

The number of Conversion Shares to be issued to each holder upon conversion shall be equal to the quotient obtained by dividing (x) the outstanding principal amount of such holder's Note, plus all accrued and unpaid interest thereon as of the date of conversion, by (y) the applicable Conversion Price.

The Conversion Shares issued upon conversion of the Notes shall have the same rights, preferences, privileges, and restrictions as the shares of Preferred Stock issued and sold to the new cash investors in the Qualified Financing, except that the Conversion Price applicable to the Notes may differ from the per-share price paid by such new cash investors as set forth above.

Illustrative Examples. The following examples are provided for illustrative purposes only, assume no accrued interest for simplicity, and are based on the aggregate principal amount of $40,000,000:

Example 1: If the per-share price paid by new investors in the Qualified Financing is $5.00 per share, then the discounted Price would be $4.00 per share (80% × $5.00). Because the discounted Price of $4.00 is less than the Valuation Cap Price of $4.1451, the Conversion Price would be $4.00 per share. In this scenario, the Notes would convert into 10,000,000 Conversion Shares ($40,000,000 ÷ $4.00 = 10,000,000).

Example 2: If the per-share price paid by new investors in the Qualified Financing is $4.80 per share, then the discounted Price would be $3.84 per share (80% × $4.80). Because the discounted Price of $3.84 is less than the Valuation Cap Price of $4.1451, the Conversion Price would be $3.84 per share. In this scenario, the Notes would convert into approximately 10,416,667 Conversion Shares ($40,000,000 ÷ $3.84 ≈ 10,416,667).

Example 3: If the per-share price paid by new investors in the Qualified Financing is $5.50 per share, then the discounted Price would be $4.40 per share (80% × $5.50). Because the discounted Price of $4.40 is greater than the Valuation Cap Price of $4.1451, the Valuation Cap Price would govern, and the Conversion Price would be $4.1451 per share. In this scenario, the Notes would convert into approximately 9,650,906 Conversion Shares ($40,000,000 ÷ $4.1451 ≈ 9,650,906).

(b) Voluntary Conversion at Maturity. If no Qualified Financing has occurred on or prior to the Maturity Date, each holder may, at its sole election, by delivery of written notice to the Company at least five (5) Business Days prior to the Maturity Date, elect to convert all (but not less than all) of the outstanding principal amount of its Note, together with all accrued and unpaid interest thereon, into shares of Common Stock at the Valuation Cap Price of $4.1451 per share. The number of shares of Common Stock to be issued upon such conversion shall be equal to the quotient obtained by dividing the outstanding principal amount of such Note, together with all accrued and unpaid interest thereon, by $4.1451.

Alternatively, if a holder does not elect to convert its Note pursuant to this Section 3.1(b), such holder may demand repayment in full of the entire outstanding principal amount of its Note, together with all accrued and unpaid interest thereon, on the Maturity Date. Any such repayment shall be made in accordance with Section 3.3. For the avoidance of doubt, the election by a holder to convert or demand repayment is a holder-by-holder determination, and the election of one holder shall not bind or affect the election of any other holder.

(c) Conversion or Repayment Upon Change of Control. Upon the occurrence of a Change of Control at any time prior to the earlier of (x) a Qualified Financing and (y) the Maturity Date, the Company shall deliver written notice to each holder of the Notes at least fifteen (15) Business Days prior to the anticipated consummation of such Change of Control (or, if fifteen (15) Business Days' prior notice is not practicable, as promptly as practicable following the Company's becoming aware of the anticipated Change of Control). Upon receipt of such notice, each holder may elect, by delivery of written notice to the Company at least five (5) Business Days prior to the consummation of such Change of Control, either:

(i) to convert all (but not less than all) of the outstanding principal amount of its Note, together with all accrued and unpaid interest thereon, into shares of Common Stock at the Valuation Cap Price of $4.1451 per share; or

(ii) to receive repayment of an amount equal to one and one-half times (1.5x) the outstanding principal amount of such holder's Note, plus all accrued and unpaid interest thereon (such amount, the "Change of Control Premium"). The Change of Control Premium shall be payable in cash in immediately available funds concurrently with or promptly following the consummation of the Change of Control.

If a holder fails to deliver a timely election notice, such holder shall be deemed to have elected repayment of the Change of Control Premium. The Company shall cause any successor, surviving, or acquiring entity in a Change of Control transaction to assume the obligations of the Company under the Notes and this Agreement, or to pay the Change of Control Premium to each holder electing repayment, concurrently with the consummation of such Change of Control.

(d) Mechanics of Conversion. The following procedures shall apply to any conversion of the Notes pursuant to this Section 3.1:

(i) Notice. In the case of an automatic conversion upon a Qualified Financing, the Company shall deliver written notice to each holder at least ten (10) Business Days prior to the anticipated closing of such Qualified Financing (or as promptly as practicable), setting forth (A) the anticipated date of the closing of the Qualified Financing, (B) the per-share price to be paid by the new investors, (C) the applicable Conversion Price, and (D) the number of Conversion Shares to be issued to such holder. In the case of a voluntary conversion under Section 3.1(b) or an election to convert under Section 3.1(c), the holder shall deliver written notice to the Company specifying its election to convert.

(ii) Delivery of Conversion Shares. The Company shall deliver to each converting holder the Conversion Shares issuable upon conversion of such holder's Note within ten (10) Business Days following (A) the closing of the Qualified Financing (in the case of an automatic conversion), (B) the Maturity Date (in the case of a voluntary conversion), or (C) the consummation of the Change of Control (in the case of a conversion under Section 3.1(c)), as applicable. The Conversion Shares shall be delivered in book-entry form through the Company's transfer agent or, if requested by the holder, by delivery of one or more stock certificates.

(iii) Fractional Shares. No fractional shares of capital stock shall be issued upon conversion of any Note. In lieu of any fractional share to which a holder would otherwise be entitled, the Company shall pay to such holder an amount in cash (rounded to the nearest whole cent) equal to the product of (A) the fractional share interest to which such holder would otherwise be entitled, multiplied by (B) the applicable Conversion Price.

(iv) Cancellation of Notes. Upon the conversion in full of a Note, such Note shall be deemed cancelled and of no further force or effect, and the holder shall promptly surrender the original Note (or an affidavit of loss in form reasonably acceptable to the Company, together with an indemnity agreement, if the original Note has been lost, stolen, or destroyed) to the Company for cancellation.

(v) Anti-Dilution Protection. The Conversion Shares issued upon conversion of the Notes shall be entitled to standard broad-based weighted-average anti-dilution protection applicable to the series of Preferred Stock into which the Notes convert, on terms consistent with the certificate of designation or other organizational documents governing such series. Such anti-dilution protection shall provide for adjustments to the applicable conversion price in the event of dilutive issuances of equity securities by the Company at a price per share less than the then-applicable conversion price, subject to customary carve-outs for issuances pursuant to the Equity Incentive Plan, issuances in connection with strategic transactions approved by the Board, and other customary exclusions.

Section 3.2 — Interest

Each Note shall bear simple interest on the outstanding principal amount thereof at a rate of six percent (6.0%) per annum, computed on the basis of a three-hundred-sixty-five (365)-day year and the actual number of days elapsed. Interest shall accrue from and including the Closing Date.

Interest on the Notes shall not be payable in cash during the term of the Notes. Instead, all accrued and unpaid interest shall be payable in kind ("PIK") by capitalizing (i.e., adding to and becoming part of) the outstanding principal amount of the applicable Note on each anniversary of the Closing Date. Upon such capitalization, the capitalized interest shall be treated as principal for all purposes of this Agreement and the Notes, including for purposes of calculating future interest accruals. For the avoidance of doubt, interest shall be simple (and shall not compound on a daily basis) between PIK capitalization dates, and interest shall accrue only on the outstanding principal amount of a Note (including previously capitalized interest that has become principal).

The PIK schedule based on the aggregate principal amount of the Notes is as follows:

No cash interest payments shall be required or permitted during the term of the Notes. All interest shall be capitalized as set forth above and shall be payable (whether in cash upon repayment or in Conversion Shares upon conversion) only upon the conversion, maturity, or acceleration of the Notes.

Section 3.3 — Maturity; Repayment

Unless earlier converted pursuant to Section 3.1 hereof or accelerated pursuant to Section 3.6 hereof, all outstanding principal (including all capitalized PIK interest that has been added to principal) and all accrued and unpaid interest on each Note shall be due and payable in full on the Maturity Date (April 12, 2027). Payment of all amounts due on the Maturity Date shall be made by wire transfer of immediately available funds in United States dollars to accounts designated in writing by the respective holders not fewer than five (5) Business Days prior to the Maturity Date. The Company shall deliver to each holder a payoff statement setting forth the total amount due to such holder at least ten (10) Business Days prior to the Maturity Date.

Section 3.4 — Senior Unsecured Obligations

The Notes shall constitute senior unsecured obligations of the Company. The Notes shall rank senior in right of payment to all existing and future subordinated indebtedness of the Company and shall rank pari passu in right of payment with all other existing and future senior unsecured indebtedness of the Company. The Notes are not secured by any assets, property, or collateral of the Company and no holder shall have any lien, security interest, or other encumbrance on any assets of the Company by virtue of holding a Note. Nothing in this Section 3.4 shall restrict the ability of the Company to incur additional indebtedness, subject to the limitations set forth in Section 7.2(a) hereof.

Section 3.5 — Prepayment

The Company may not prepay any Note, in whole or in part, without the prior written consent of the Majority Holders. Any permitted prepayment shall be made ratably among all holders of the Notes in proportion to their respective outstanding principal amounts (including capitalized PIK interest) and shall include all accrued and unpaid interest through the date of prepayment.

Section 3.6 — Events of Default

(a) Events of Default. Each of the following shall constitute an "Event of Default" under this Agreement and the Notes:

(i) Payment Default. The Company shall fail to pay any principal amount or interest on any Note when due and payable (whether at maturity, upon acceleration, or otherwise), and such failure shall continue unremedied for a period of five (5) Business Days after the date on which such payment was due.

(ii) Breach of Representations, Warranties, or Covenants. The Company shall breach in any material respect any representation, warranty, or covenant contained in this Agreement or any other Transaction Document, and (A) if such breach is of a representation or warranty, such representation or warranty was inaccurate in any material respect as of the date made, or (B) if such breach is of a covenant, such breach shall continue unremedied for a period of thirty (30) days after written notice thereof from the Majority Holders to the Company; provided that no cure period shall apply if such breach is not capable of being cured.

(iii) Voluntary Bankruptcy. The Company shall (A) commence a voluntary case or proceeding under any applicable federal, state, or foreign bankruptcy, insolvency, reorganization, or similar law, (B) consent to the entry of an order for relief against it in an involuntary case or proceeding under any such law, (C) consent to the appointment of a receiver, trustee, custodian, assignee for the benefit of creditors, or similar official of the Company or of any substantial part of its property, (D) make a general assignment for the benefit of its creditors, or (E) admit in writing its inability to pay its debts as they become due.

(iv) Involuntary Bankruptcy. An involuntary case or proceeding shall be commenced against the Company under any applicable federal, state, or foreign bankruptcy, insolvency, reorganization, or similar law, or a decree or order for relief shall be entered against the Company by a court of competent jurisdiction, or a receiver, trustee, custodian, or similar official shall be appointed for the Company or any substantial part of its property, and such case, proceeding, decree, order, or appointment shall continue undismissed and unstayed for a period of sixty (60) consecutive days.

(v) Judgment Default. A final, non-appealable judgment or order for the payment of money in excess of One Million Dollars ($1,000,000) (exclusive of amounts covered by insurance for which the insurer has acknowledged coverage) shall be rendered against the Company by a court of competent jurisdiction, and such judgment or order shall remain unsatisfied, unvacated, unbonded, or unstayed for a period of sixty (60) consecutive days after the date on which the right to appeal therefrom has expired.

(vi) Dissolution. The Company shall take any corporate action to authorize, or any Governmental Authority shall issue any order, decree, or ruling directing, the dissolution, winding up, or liquidation of the Company.

(b) Acceleration. Upon the occurrence and during the continuance of any Event of Default described in clauses (i), (ii), (v), or (vi) of Section 3.6(a), the Majority Holders may, by written notice to the Company, declare all outstanding principal (including capitalized PIK interest) and accrued and unpaid interest on all Notes to be immediately due and payable, whereupon the same shall become immediately due and payable, without presentment, demand, protest, or further notice of any kind, all of which are hereby expressly waived by the Company. Upon the occurrence of any Event of Default described in clause (iii) or (iv) of Section 3.6(a), all outstanding principal and accrued and unpaid interest on all Notes shall automatically become immediately due and payable, without any declaration or other act on the part of any holder, and without presentment, demand, protest, or further notice of any kind.

(c) Default Interest. Upon the occurrence and during the continuance of an Event of Default, interest on the outstanding principal amount of each Note shall accrue at a rate of eight percent (8.0%) per annum (representing an increase of two percent (2.0%) from the standard rate of six percent (6.0%)), from the date of such Event of Default until such Event of Default is cured or waived by the Majority Holders in accordance with Section 8.2 hereof.

(d) Remedies Cumulative. The rights and remedies of the holders of the Notes upon an Event of Default are cumulative and are not exclusive of any other rights or remedies available at law or in equity.

Section 3.7 — Transfer Restrictions

(a) No Note may be transferred, assigned, pledged, hypothecated, or otherwise disposed of by any holder without the prior written consent of the Company (which consent shall not be unreasonably withheld, conditioned, or delayed); provided that any holder may transfer its Note to an Affiliate of such holder without the Company's consent, so long as such transferee Affiliate agrees in writing to be bound by the terms and conditions of this Agreement and the Notes.

(b) All transfers of Notes shall be subject to compliance with all applicable federal and state securities laws, including the Securities Act. Any transferee of a Note shall be required to deliver to the Company (i) an opinion of counsel reasonably satisfactory to the Company, or (ii) such other evidence as may be reasonably requested by the Company, in each case to the effect that such transfer is exempt from, or not subject to, the registration requirements of the Securities Act.

"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS."

ARTICLE 4 — REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to each Purchaser, as of the date hereof and as of the Closing Date (except where a particular representation or warranty expressly speaks as of a specific date, in which case such representation or warranty is made as of such date), subject in each case to the exceptions, qualifications, and disclosures set forth in the Disclosure Schedules (each of which exceptions, qualifications, and disclosures shall be deemed to qualify and modify the representations and warranties to which they expressly relate and such other representations and warranties to which the applicability of such exception, qualification, or disclosure is reasonably apparent on its face), as follows:

Section 4.1 — Organization and Good Standing

The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. The Company was incorporated on March 14, 2017, and its file number with the Secretary of State of the State of Delaware is 6347821. The Company's registered agent in the State of Delaware is Capitol Registered Agents, Inc., located at 1209 Orange Street, Suite 200, Wilmington, Delaware 19801. The Company is duly qualified to transact business as a foreign corporation and is in good standing in each jurisdiction where the nature of its business or the ownership, leasing, or operation of its properties requires such qualification, including the State of California (foreign qualification filed with the California Secretary of State on April 3, 2017; California entity number C4085629). The Company has all requisite corporate power and authority to own, lease, and operate its properties and assets and to carry on its business as currently conducted and as proposed to be conducted. A true and complete copy of the Company's Restated Certificate of Incorporation, as currently in effect, and the Company's Bylaws, as currently in effect, have been made available to the Purchasers. The Company's federal employer identification number is 82-3194507. The Company does not have any subsidiaries and does not own, directly or indirectly, any equity interest in any other Person.

Section 4.2 — Authorization

The execution, delivery, and performance of each Transaction Document by the Company, and the issuance and sale of the Notes hereunder, have been duly authorized by all necessary corporate action on the part of the Company, including the approval of the Board of Directors by written consent dated April 5, 2024, and no further approval, authorization, or consent by the Company's stockholders or any other Person is required for the Company to execute, deliver, and perform its obligations under the Transaction Documents or to issue the Notes. The Company has obtained all consents, approvals, and waivers required under its Restated Certificate of Incorporation, Bylaws, and any stockholder agreements, investor rights agreements, voting agreements, or similar agreements to which the Company is a party in connection with the execution, delivery, and performance of the Transaction Documents and the issuance of the Notes.

Section 4.3 — Enforceability

This Agreement has been, and each other Transaction Document will be at or prior to the Closing, duly executed and delivered by the Company. Each Transaction Document constitutes, or upon execution and delivery will constitute, the valid and binding obligation of the Company, enforceable against the Company in accordance with its respective terms, subject in each case to the Enforceability Exceptions.

Section 4.4 — No Conflicts

The execution, delivery, and performance by the Company of the Transaction Documents, the issuance of the Notes, and the consummation of the transactions contemplated hereby and thereby do not and will not:

(a) violate, conflict with, or result in a breach of any provision of the Company's Restated Certificate of Incorporation or Bylaws, each as currently in effect;

(b) violate, conflict with, or result in a breach of, or constitute a default (or an event that, with notice, lapse of time, or both, would constitute a default) under, any applicable law, rule, regulation, order, judgment, injunction, decree, or governmental permit or license binding on the Company or any of its assets or properties;

(c) result in a breach of, constitute a default (or an event that, with notice, lapse of time, or both, would constitute a default) under, or give rise to a right of termination, cancellation, modification, or acceleration of any obligation or loss of any benefit under, any material contract, agreement, lease, license, instrument, or other arrangement to which the Company is a party or by which the Company or any of its assets or properties is bound; or

(d) result in the creation or imposition of any lien, encumbrance, claim, security interest, or charge upon any of the Company's assets or properties.

No consent, approval, order, license, permit, action by, or authorization of, or declaration, filing, or registration with, any Governmental Authority or other Person is required in connection with the execution, delivery, and performance by the Company of the Transaction Documents, the issuance of the Notes, or the consummation of the transactions contemplated hereby, other than (i) the filing of a Form D with the Securities and Exchange Commission, (ii) applicable blue sky filings, and (iii) such other filings or notifications as may be required under applicable securities laws.

Section 4.5 — Capitalization

(a) As of immediately prior to the Closing, the authorized capital stock of the Company consists of (i) 100,000,000 shares of Common Stock, par value $0.0001 per share, of which 12,400,000 shares are issued and outstanding, and (ii) 50,000,000 shares of Preferred Stock, par value $0.0001 per share, of which 6,850,000 shares of Series A Preferred Stock, 11,500,000 shares of Series B Preferred Stock, and 14,000,000 shares of Series C Preferred Stock are issued and outstanding. In addition, there are outstanding options to purchase an aggregate of 3,500,000 shares of Common Stock under the Company's 2018 Equity Incentive Plan, with a weighted average exercise price of $1.87 per share. The total Fully Diluted Capitalization as of immediately prior to the Closing is 48,250,000 shares.

(b) All outstanding shares of Common Stock and Preferred Stock have been duly authorized, validly issued, fully paid, and nonassessable, and were issued in compliance with all applicable federal and state securities laws and not in violation of any preemptive rights, rights of first refusal, or similar rights. The Conversion Shares, when issued in accordance with the terms of this Agreement and the Notes, will be duly authorized, validly issued, fully paid, and nonassessable.

(c) Except as set forth in Section 4.5 of the Disclosure Schedules, there are no outstanding options, warrants, rights (including conversion or preemptive rights, rights of first refusal, or similar rights), or agreements for the purchase or acquisition from the Company of any shares of its capital stock or any securities convertible into or exercisable or exchangeable for shares of its capital stock, other than options outstanding under the 2018 Equity Incentive Plan as described in Section 4.5(a) above.

(d) The Company's most recent independent valuation of the Common Stock for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, was completed on January 15, 2024, and established the fair market value of the Common Stock at $4.15 per share.

(e) The capitalization table set forth in the Disclosure Schedules accurately reflects the fully diluted capitalization of the Company as of immediately prior to the Closing, including all outstanding shares, options, warrants, and other convertible or exercisable securities.

Section 4.6 — Financial Statements

The Company has delivered to the Purchasers:

(a) the Company's audited financial statements for the fiscal year ended December 31, 2023 (consisting of a balance sheet, statement of operations, statement of changes in stockholders' equity (deficit), and statement of cash flows, together with the notes thereto), which were audited by Baxter & Calloway, CPAs, the Company's independent registered public accounting firm (engagement partner: Nadia Sorensen, CPA) (the "Audited Financial Statements"); and

(b) the Company's unaudited interim financial statements (consisting of a balance sheet and statement of operations) for the most recently available interim period (the "Interim Financial Statements" and, together with the Audited Financial Statements, the "Financial Statements").

As of December 31, 2023, the Company's financial position was as follows: total assets of $74,100,000; cash and cash equivalents of $51,300,000; total liabilities of $18,700,000; and a net loss for the fiscal year ended December 31, 2023, of ($62,400,000). The Company has no revenue.

The Financial Statements have been prepared in accordance with GAAP, consistently applied throughout the periods covered thereby, and present fairly in all material respects the financial condition, results of operations, changes in stockholders' equity, and cash flows of the Company as of the dates and for the periods indicated therein, subject, in the case of the Interim Financial Statements, to normal year-end audit adjustments (none of which are expected to be material) and the absence of footnote disclosures.

Section 4.7 — Absence of Changes

Since December 31, 2023, the Company has conducted its business only in the ordinary course of business consistent with past practice, and there has been no event, change, circumstance, development, condition, or effect that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Without limiting the generality of the foregoing, since December 31, 2023, the Company has not (a) declared, set aside, or paid any dividend or distribution on any of its capital stock, (b) redeemed or repurchased any shares of its capital stock, (c) incurred any indebtedness for borrowed money in excess of $500,000, (d) made any material change in its accounting methods, principles, or practices, (e) sold, transferred, leased, or otherwise disposed of any material assets outside the ordinary course of business, or (f) entered into any material contract or agreement not in the ordinary course of business. As of the date hereof, the Company's monthly cash burn rate is approximately $5,800,000 (approximately $69,600,000 annualized), and the Company's remaining cash runway is approximately eighteen (18) months, inclusive of the proceeds of the offering contemplated by this Agreement.

Section 4.8 — Litigation

Except as set forth in Section 4.8 of the Disclosure Schedules, there is no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or arbitration pending or, to the Company's knowledge, threatened in writing against the Company or any of its officers or directors (in their capacities as such) before any court, arbitrator, or Governmental Authority that (a) would reasonably be expected to have a Material Adverse Effect, (b) seeks to restrain, enjoin, or prevent the consummation of, or otherwise challenge, the transactions contemplated by this Agreement, or (c) involves a claim for damages in excess of $500,000. To the Company's knowledge, there are no facts or circumstances that would reasonably be expected to give rise to any such action, suit, proceeding, or claim.

Section 4.9 — Compliance with Laws

The Company has complied, and is currently in compliance, in all material respects with all applicable laws, rules, regulations, ordinances, orders, judgments, decrees, permits, licenses, and governmental requirements applicable to the conduct of its business and the ownership and use of its assets and properties. Without limiting the generality of the foregoing, the Company is in material compliance with all applicable requirements of the United States Food and Drug Administration ("FDA"), including all applicable regulations, guidance documents, and requirements set forth in Title 21 of the Code of Federal Regulations, and all other Governmental Authorities with jurisdiction over the Company's clinical and preclinical programs. The Company has not received any written notice from any Governmental Authority alleging any material violation of applicable law. The Company holds all permits, licenses, and authorizations necessary for the lawful conduct of its business as currently conducted.

Section 4.10 — Intellectual Property

The Company owns, or has valid and enforceable rights to use pursuant to licenses, sublicenses, or other agreements, all patents, patent applications, trademarks, trademark registrations and applications, trade names, service marks, copyrights, copyright registrations and applications, trade secrets, know-how, inventions, proprietary data, and other intellectual property rights (collectively, "intellectual Property") that are necessary for or used in the conduct of the Company's business as currently conducted and as proposed to be conducted, free and clear of all liens and encumbrances (other than Permitted Liens). Except as set forth in Section 4.10 of the Disclosure Schedules, (a) the Company has not received any written notice of any claim that the Company is infringing, misappropriating, or otherwise violating the intellectual Property of any third party, (b) to the Company's knowledge, no third party is infringing, misappropriating, or otherwise violating any intellectual Property owned by the Company, and (c) the Company has taken commercially reasonable measures to protect the confidentiality of its trade secrets and other proprietary information.

Section 4.11 — Material Contracts

All material contracts, agreements, instruments, and arrangements to which the Company is a party or by which the Company or any of its assets or properties is bound (each, a "Material Contract") are listed in Section 4.11 of the Disclosure Schedules. True, correct, and complete copies of each Material Contract (including all amendments and modifications thereto) have been made available to the Purchasers. Each Material Contract is valid, binding, and in full force and effect, and is enforceable by and against the Company in accordance with its terms, subject to the Enforceability Exceptions. Neither the Company nor, to the Company's knowledge, any other party thereto, is in material breach or default under any Material Contract, and no event has occurred that, with the giving of notice, the passage of time, or both, would constitute a material breach or default under any Material Contract or give rise to a right of termination, cancellation, or acceleration thereunder.

Section 4.12 — Tax Matters

The Company has timely filed (taking into account any extensions duly obtained) all federal, state, local, and foreign tax returns required to be filed by it, and all such tax returns are true, correct, and complete in all material respects. The Company has paid all taxes (whether or not shown on such returns) that are due and payable, and has withheld and remitted to the appropriate taxing authorities all amounts required to have been withheld and remitted. There are no pending or, to the Company's knowledge, threatened tax audits, assessments, deficiencies, or other claims with respect to the Company's taxes. The Company has not received any written notice of assessment or proposed assessment by any taxing authority in connection with any tax return. The Company has not waived or extended any statute of limitations with respect to taxes. The Company is not a party to any tax-sharing, tax indemnification, or similar agreement (other than any such agreement entered into in the ordinary course of business, the primary purpose of which is not tax-related).

Section 4.13 — Employee Matters

The Company is, and at all times has been, in material compliance with all applicable laws, rules, and regulations relating to employment and labor, including all laws relating to wages, hours, overtime, discrimination, harassment, retaliation, workplace health and safety, workers' compensation, immigration, collective bargaining, employee benefits, and the classification of workers as employees or independent contractors. Except as set forth in Section 4.13 of the Disclosure Schedules, (a) the Company is not a party to or bound by any collective bargaining agreement, (b) no labor union or works council has been recognized or certified as a bargaining representative for any employees of the Company, (c) there are no pending or, to the Company's knowledge, threatened labor disputes, grievances, unfair labor practice charges, or similar proceedings involving the Company, and (d) the Company has not experienced any work stoppage, slowdown, or lockout.

Section 4.14 — Insurance

The Company maintains insurance policies with reputable insurance carriers in amounts and covering risks that are customary and appropriate for companies of similar size and stage in the biopharmaceutical industry, including directors and officers liability insurance, commercial general liability insurance, product liability insurance, property insurance, and workers' compensation insurance. All such insurance policies are in full force and effect, all premiums due thereon have been paid, and the Company has not received any notice of cancellation, non-renewal, or material amendment with respect to any such policy. The Company has not made any claim under any such insurance policy that is currently pending or remains outstanding.

Section 4.15 — Regulatory Matters

(a) The Company's lead clinical asset, GDT-4187, is a selective CDK9/FLT3 dual kinase inhibitor currently being evaluated in a Phase 2b clinical trial (n=280 patients) for the second-line treatment of refractory non-small cell lung cancer. The Phase 2b clinical trial is being conducted at twenty-two (22) clinical centers across eight (8) states in the United States. The Company has obtained all necessary approvals, authorizations, and clearances from the FDA and applicable institutional review boards to conduct such clinical trial, and the clinical trial is being conducted in accordance with the Company's approved protocol and all applicable laws, regulations, and requirements.

(b) GDT-5201, the Company's next-generation PROTAC degrader, is in preclinical development. The Company is conducting preclinical studies for GDT-5201 in accordance with all applicable regulations, including good laboratory practice (GLP) regulations where applicable.

(c) The Company is in material compliance with all applicable regulatory requirements, including FDA regulations, good clinical practice (GCP) guidelines, good laboratory practice (GLP) regulations, good manufacturing practice (GMP) requirements, and all other applicable requirements of Governmental Authorities with jurisdiction over the Company's clinical and preclinical programs.

(d) Except as set forth in Section 4.15 of the Disclosure Schedules, the Company has not received any FDA Form 483 observations, warning letters, untitled letters, clinical holds, or other correspondence from the FDA or any other Governmental Authority alleging any material deficiency or violation in connection with the Company's clinical or preclinical programs.

Section 4.16 — No General Solicitation

Neither the Company nor any Person acting on behalf of the Company has offered or sold the Notes by any form of general solicitation or general advertising (as such terms are used in Regulation D under the Securities Act), including any advertisement, article, notice, or other communication published in any newspaper, magazine, website, or similar medium, or broadcast over television, radio, or the internet, or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. The Notes are being offered and sold only to the Purchasers, each of whom is an existing stockholder of the Company and has a pre-existing substantive relationship with the Company.

Section 4.17 — Private Placement

Assuming the accuracy of the representations and warranties of the Purchasers set forth in Article 5 hereof, the offer, sale, and issuance of the Notes as contemplated by this Agreement

NOTE PURCHASE AGREEMENT
Execution Version
Dated as of April 9, 2024
by and among
GENOME DX THERAPEUTICS INC. a Delaware corporation (the "Company")
and
PINNACLE BIOVENTURES FUND III, L.P. a Delaware limited partnership
CORMORANT HEALTH CAPITAL PARTNERS, L.P. a Delaware limited partnership
ALDER CREEK LIFE SCIENCES FUND II, L.P. a Delaware limited partnership
(each, a "Purchaser" and collectively, the "Purchasers")
Aggregate Principal Amount: $40,000,000
Senior Unsecured Convertible Promissory Notes
NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT (this "Agreement") is entered into as of April 9, 2024, by and among Genome Dx Therapeutics Inc., a Delaware corporation (the "Company"), and each of the purchasers identified on the signature pages hereto (each, a "Purchaser" and collectively, the "Purchasers").
RECITALS
WHEREAS, the Company is a clinical-stage biopharmaceutical company duly incorporated and existing under the laws of the State of Delaware, with its principal place of business located at 450 Pinnacle Drive, Suite 300, South San Francisco, California 94080;
WHEREAS, the Company desires to issue and sell, and each Purchaser desires to purchase, senior unsecured convertible promissory notes in the aggregate principal amount of Forty Million Dollars ($40,000,000) (the "Notes"), on the terms and subject to the conditions set forth herein;
WHEREAS, the Notes are being issued and sold in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), afforded by Section 4(a)(2) thereof and Rule 506(b) of Regulation D promulgated thereunder, and each Purchaser is an existing stockholder of the Company and an accredited investor within the meaning of Rule 501(a) of Regulation D;
WHEREAS, the Company intends to use the net proceeds from the sale of the Notes to fund the continuation and expansion of its Phase 2b clinical trial for GDT-4187, a selective CDK9/FLT3 dual kinase inhibitor being developed for the second-line treatment of refractory non-small cell lung cancer, to fund preclinical development activities for GDT-5201, and for general corporate purposes and working capital; and
WHEREAS, the parties hereto desire to set forth the terms and conditions upon which the Notes will be issued, sold, and purchased.
NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations, and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1 — DEFINITIONS
Section 1.1 — Definitions
As used in this Agreement, the following terms shall have the meanings set forth below:
"Alder Creek" means Alder Creek Life Sciences Fund II, L.P., a Delaware limited partnership, with its principal office at 555 Mission Street, Suite 2800, San Francisco, California 94105.
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person. For purposes of this definition, "control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
"Agreement" means this Note Purchase Agreement, as it may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.
"Board" means the Board of Directors of the Company.
"Business Day" means any day other than a Saturday, Sunday, or any day on which banking institutions in San Francisco, California or Wilmington, Delaware are authorized or obligated by applicable law or executive order to close.
"Change of Control" means (a) any merger, consolidation, or other business combination transaction involving the Company in which the holders of the Company's capital stock immediately prior to such transaction hold, immediately following such transaction, less than fifty percent (50%) of the voting power of the surviving or resulting entity (or the direct or indirect parent entity of such surviving or resulting entity, if applicable); (b) the sale, lease, transfer, exclusive license, or other disposition, in a single transaction or a series of related transactions, of all or substantially all of the assets of the Company; or (c) any transaction or series of related transactions (including any reorganization, recapitalization, stock purchase, or other similar transaction) resulting in any Person or "group" (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) acquiring beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of more than fifty percent (50%) of the outstanding voting securities of the Company.
"Change of Control Premium" has the meaning set forth in Section 3.1(c).
"Closing" means the closing of the purchase and sale of the Notes pursuant to Section 2.2 hereof.
"Closing Date" means April 12, 2024, or such other date as the Company and the Purchasers may mutually agree in writing.
"Common Stock" means the Common Stock, par value $0.0001 per share, of the Company.
"Company" means Genome Dx Therapeutics Inc., a Delaware corporation.
"Conversion Price" has the meaning set forth in Section 3.1(a).
"Conversion Shares" means the shares of capital stock of the Company issuable upon conversion of the Notes in accordance with Section 3.1 hereof.
"Cormorant" means Cormorant Health Capital Partners, L.P., a Delaware limited partnership, with its principal office at 375 Park Avenue, Suite 3201, New York, New York 10152.
"discounted Price" has the meaning set forth in Section 3.1(a).
"Disclosure Schedules" means the disclosure schedules delivered by the Company to the Purchasers concurrently with the execution of this Agreement, as set forth in Schedule 4 hereto.
"Enforceability Exceptions" means the limitations on enforceability imposed by (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or similar laws of general applicability affecting the enforcement of creditors' rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
"Equity Incentive Plan" means the Company's 2018 Equity Incentive Plan, as amended from time to time.
"Escrow Agent" means Meridian Pacific Bank, N.A., a national banking association, with its principal office at 350 Sansome Street, 12th Floor, San Francisco, California 94104.
"Escrow Agreement" means the Escrow Agreement to be entered into among the Company, the Purchasers, and the Escrow Agent in connection with the Closing, in form and substance reasonably satisfactory to the parties thereto.
"Event of Default" has the meaning set forth in Section 3.6.
"Fully Diluted Capitalization" means, as of immediately prior to the Closing, 48,250,000 shares, consisting of all outstanding shares of Common Stock, all outstanding shares of Preferred Stock (calculated on an as-converted-to-Common Stock basis), and all shares of Common Stock issuable upon the exercise of all outstanding options, warrants, and other convertible securities of the Company (whether or not vested or currently exercisable), in each case calculated without giving effect to the issuance of the Notes or the Conversion Shares.
"GAAP" means United States generally accepted accounting principles, consistently applied throughout the periods involved.
"Governmental Authority" means any federal, state, local, or foreign government or political subdivision thereof, or any agency, authority, bureau, commission, department, instrumentality, or regulatory body thereof, or any court, tribunal, or arbitrator.
"Knowledge" or "knowledge" means, with respect to the Company, the actual knowledge, after reasonable inquiry, of Dr. Marcus Avellino (Chief Executive Officer), Diane Kowalski (Chief Financial Officer), and Priya Raghunathan (General Counsel & Corporate Secretary).
"Majority Holders" means, at any time, the holders of Notes representing more than fifty percent (50%) of the aggregate outstanding principal amount of all Notes then outstanding. For the avoidance of doubt, as of the Closing, the threshold for Majority Holders is $20,000,001 of aggregate outstanding principal.
"Material Adverse Effect" means any event, circumstance, change, or effect that, individually or in the aggregate with all other events, circumstances, changes, or effects, has had or would reasonably be expected to have a material adverse effect on (a) the business, assets, liabilities, financial condition, or results of operations of the Company, taken as a whole, or (b) the ability of the Company to perform its obligations under the Transaction Documents in any material respect; provided, however, that none of the following shall constitute or be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur: (i) changes in general economic, financial, or market conditions (including changes in prevailing interest rates, credit availability, currency exchange rates, or price levels or trading volumes in the United States or foreign securities markets); (ii) changes or conditions generally affecting the biopharmaceutical industry and not disproportionately affecting the Company relative to other participants in the biopharmaceutical industry; (iii) changes in applicable law, regulation, or GAAP or the interpretation or enforcement thereof after the date hereof; or (iv) the public announcement or pendency of the transactions contemplated by this Agreement.
"Maturity Date" means April 12, 2027, which is thirty-six (36) months from the Closing Date.
"MFN Period" means the period commencing on the Closing Date and ending on the date that is twelve (12) months after the Closing Date.
"Notes" means the senior unsecured convertible promissory notes issued by the Company pursuant to this Agreement, substantially in the form attached hereto as Exhibit A, as the same may be amended, restated, or otherwise modified from time to time in accordance with the terms thereof and hereof.
"Paying Agent" means Meridian Pacific Bank, N.A., in its capacity as paying agent for the Notes, or any qualified successor paying agent appointed in accordance with Section 7.7.
"Permitted Liens" means (a) statutory liens for taxes, assessments, or other governmental charges not yet due and payable or being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP; (b) mechanics', carriers', workers', repairers', and other similar liens arising or incurred in the ordinary course of business relating to obligations that are not overdue for a period of more than sixty (60) days or that are being contested in good faith by appropriate proceedings; and (c) liens on equipment acquired in the ordinary course of business securing purchase money indebtedness not exceeding $500,000 individually or $1,000,000 in the aggregate.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, Governmental Authority, or any other entity.
"PIK" or "Paid-in-Kind" has the meaning set forth in Section 3.2.
"Pinnacle" means Pinnacle BioVentures Fund III, L.P., a Delaware limited partnership, with its principal office at 101 Federal Street, 26th Floor, Boston, Massachusetts 02110.
"Preferred Stock" means, collectively, the Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock of the Company.
"Purchase Price" means, with respect to each Purchaser, the aggregate principal amount of Notes to be purchased by such Purchaser as set forth opposite such Purchaser's name on Schedule 1 hereto.
"Purchasers" means, collectively, Pinnacle, Cormorant, and Alder Creek, and each individually a "Purchaser."
"Qualified Financing" means a bona fide equity financing of the Company occurring after the date hereof in which the Company issues and sells shares of its Preferred Stock (or a newly created series of Preferred Stock) and the aggregate gross proceeds received by the Company therefrom (including, for the avoidance of doubt, the aggregate principal amount of Notes converting in connection therewith, together with all accrued and unpaid interest thereon) equal or exceed Fifty Million Dollars ($50,000,000).
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
"Transaction Documents" means this Agreement, the Notes, the Disclosure Schedules, the Escrow Agreement, and each other agreement, certificate, document, and instrument delivered by any party in connection with the transactions contemplated hereby.
"Valuation Cap" means Two Hundred Million Dollars ($200,000,000), representing the pre-money valuation cap applicable to the conversion of the Notes.
"Valuation Cap Price" means an amount equal to the Valuation Cap divided by the Fully Diluted Capitalization, which as of the date hereof equals Four Dollars and Fourteen and 51/100 Cents ($4.1451) per share (calculated as $200,000,000 ÷ 48,250,000).
Section 1.2 — Rules of Construction
Unless the context of this Agreement otherwise requires:
(a) References to any Section, Article, Exhibit, or Schedule shall be to the corresponding Section, Article, Exhibit, or Schedule of or to this Agreement, unless otherwise specifically indicated.
(b) The headings and captions of the various Sections, Articles, Exhibits, and Schedules of this Agreement are for convenience of reference only and shall not affect the meaning or interpretation of this Agreement.
(c) The word "including" (and with correlative meaning, "include" and "includes") means including without limiting the generality of any description preceding or succeeding such word, and shall be deemed to be followed by the phrase "without limitation."
(d) The use of the singular form of any word shall include the plural, and the use of the plural form shall include the singular, in each case as the context may require.
(e) References to any gender shall include all genders.
(f) The words "herein," "hereof," "hereto," "hereunder," and similar terms refer to this Agreement as a whole and not to any particular provision of this Agreement.
(g) References to "dollars" or "$" shall mean United States dollars.
(h) References to any agreement, document, or instrument mean such agreement, document, or instrument as amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms, unless otherwise specified.
(i) References to any law, statute, rule, or regulation include any amendment, modification, or replacement thereof and all rules and regulations promulgated thereunder, unless otherwise specified.
(j) The parties have participated jointly in the negotiation and drafting of this Agreement, and in the event of any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.
ARTICLE 2 — PURCHASE AND SALE OF NOTES
Section 2.1 — Purchase and Sale
Subject to the terms and conditions of this Agreement, the Company hereby agrees to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, hereby agrees to purchase from the Company, a Note in the principal amount set forth opposite such Purchaser's name on Schedule 1 attached hereto, for an aggregate principal amount of Forty Million Dollars ($40,000,000), allocated among the Purchasers as follows:
The purchase price for each Note shall be equal to one hundred percent (100%) of the principal amount thereof. No original issue discount shall apply to any Note issued hereunder. Each Purchaser's obligation to purchase its Note is several and not joint, and no Purchaser shall be responsible for the failure of any other Purchaser to purchase its Note.
Section 2.2 — Closing
(a) Time and Place. The Closing shall take place on the Closing Date at the offices of Calderwood & Harkness LLP, 600 California Street, 40th Floor, San Francisco, California 94108, or at such other place or by electronic exchange of executed documents and other deliverables, as the Company and the Purchasers may mutually agree in writing. The Closing shall be deemed to have occurred upon the satisfaction or waiver of all conditions to Closing set forth in Article 6 and the delivery of all closing deliverables specified herein.
(b) Closing Deliveries. At the Closing:
(i) Each Purchaser shall deliver to the Escrow Agent (or, if the Escrow Agreement is not then in effect, directly to the Company) the Purchase Price for such Purchaser's Note by wire transfer of immediately available funds in United States dollars in accordance with the wire instructions set forth on Schedule 2 hereto.
(ii) The Company shall deliver to each Purchaser a Note in the principal amount set forth opposite such Purchaser's name on Schedule 1 hereto, duly executed by an authorized officer of the Company.
(iii) The Company shall deliver each of the closing deliverables set forth in Section 6.2 hereof.
(iv) Each Purchaser shall deliver each of the closing deliverables set forth in Section 6.3 hereof.
(c) Escrow. All funds delivered by the Purchasers in connection with the Closing shall be deposited into escrow at Meridian Pacific Bank, N.A., Trust Account No. 7841-0093-22 (the "Escrow Account"), and shall be held, invested, and disbursed in accordance with the terms of the Escrow Agreement. Funds held in the Escrow Account shall be released to the Company's designated operating account promptly upon the satisfaction or waiver of all conditions to Closing set forth in Article 6. In the event that the Closing does not occur on or before the date that is thirty (30) days after the date hereof (or such later date as the Company and the Purchasers may mutually agree in writing), all funds in the Escrow Account shall be promptly returned to the respective Purchasers, without interest (other than any interest earned on such funds while held in escrow, which shall be disbursed to the applicable Purchasers on a pro rata basis).
Section 2.3 — Use of Proceeds
The Company shall use the aggregate net proceeds received from the sale of the Notes as follows:
(a) Approximately Twenty-Eight Million Dollars ($28,000,000) for the continuation and expansion of the Company's Phase 2b clinical trial for GDT-4187, a selective CDK9/FLT3 dual kinase inhibitor being developed by the Company for the second-line treatment of refractory non-small cell lung cancer. As of the date hereof, the Phase 2b clinical trial is being conducted at twenty-two (22) clinical centers across eight (8) states in the United States, with topline data expected in the first quarter of 2025. The proceeds allocated to GDT-4187 are expected to cover clinical trial operating costs, clinical site payments, contract research organization fees, bioanalytical and pharmacokinetic services, data management and statistical analysis, regulatory submissions, and related expenses.
(b) Approximately Seven Million Dollars ($7,000,000) for preclinical development of GDT-5201, the Company's next-generation PROTAC degrader program, including lead optimization, in vitro and in vivo efficacy and toxicology studies, IND-enabling studies, and related research activities.
(c) Approximately Five Million Dollars ($5,000,000) for general corporate purposes and working capital, including but not limited to personnel costs, facility expenses, legal and accounting fees, insurance premiums, and other administrative and operational expenses incurred in the ordinary course of business.
The Company acknowledges that the foregoing represents the Company's current intentions with respect to the use of proceeds and that the actual allocation of proceeds may vary from the estimates set forth above based on the Company's evolving business needs and operational requirements. Notwithstanding the foregoing, the Company shall not materially deviate from the foregoing use of proceeds without the prior written consent of the Majority Holders.
ARTICLE 3 — TERMS OF THE NOTES
Section 3.1 — Conversion
(a) Automatic Conversion Upon Qualified Financing.  Upon the closing of a Qualified Financing (i.e., an equity financing in which the aggregate gross proceeds received by the Company, including the aggregate principal amount of Notes converting in connection therewith and all accrued and unpaid interest thereon, equal or exceed Fifty Million Dollars ($50,000,000)), each Note shall automatically convert, without any further action required on the part of the holder thereof or the Company, into fully paid and nonassessable shares of the series of Preferred Stock issued and sold by the Company in such Qualified Financing.
The price per share at which each Note shall convert (the "Conversion Price") shall be the lesser of:
(i) eighty percent (80%) of the per-share price paid by the new cash investors in the Qualified Financing (the "discounted Price"), reflecting a twenty percent (20%) discount to such per-share price; or
(ii) the Valuation Cap Price of Four Dollars and Fourteen and 51/100 Cents ($4.1451) per share, calculated as the Valuation Cap ($200,000,000) divided by the Fully Diluted Capitalization (48,250,000 shares).
The number of Conversion Shares to be issued to each holder upon conversion shall be equal to the quotient obtained by dividing (x) the outstanding principal amount of such holder's Note, plus all accrued and unpaid interest thereon as of the date of conversion, by (y) the applicable Conversion Price.
The Conversion Shares issued upon conversion of the Notes shall have the same rights, preferences, privileges, and restrictions as the shares of Preferred Stock issued and sold to the new cash investors in the Qualified Financing, except that the Conversion Price applicable to the Notes may differ from the per-share price paid by such new cash investors as set forth above.
Illustrative Examples. The following examples are provided for illustrative purposes only, assume no accrued interest for simplicity, and are based on the aggregate principal amount of $40,000,000:
Example 1: If the per-share price paid by new investors in the Qualified Financing is $5.00 per share, then the discounted Price would be $4.00 per share (80% × $5.00). Because the discounted Price of $4.00 is less than the Valuation Cap Price of $4.1451, the Conversion Price would be $4.00 per share. In this scenario, the Notes would convert into 10,000,000 Conversion Shares ($40,000,000 ÷ $4.00 = 10,000,000).
Example 2: If the per-share price paid by new investors in the Qualified Financing is $4.80 per share, then the discounted Price would be $3.84 per share (80% × $4.80). Because the discounted Price of $3.84 is less than the Valuation Cap Price of $4.1451, the Conversion Price would be $3.84 per share. In this scenario, the Notes would convert into approximately 10,416,667 Conversion Shares ($40,000,000 ÷ $3.84 ≈ 10,416,667).
Example 3: If the per-share price paid by new investors in the Qualified Financing is $5.50 per share, then the discounted Price would be $4.40 per share (80% × $5.50). Because the discounted Price of $4.40 is greater than the Valuation Cap Price of $4.1451, the Valuation Cap Price would govern, and the Conversion Price would be $4.1451 per share. In this scenario, the Notes would convert into approximately 9,650,906 Conversion Shares ($40,000,000 ÷ $4.1451 ≈ 9,650,906).
(b) Voluntary Conversion at Maturity.  If no Qualified Financing has occurred on or prior to the Maturity Date, each holder may, at its sole election, by delivery of written notice to the Company at least five (5) Business Days prior to the Maturity Date, elect to convert all (but not less than all) of the outstanding principal amount of its Note, together with all accrued and unpaid interest thereon, into shares of Common Stock at the Valuation Cap Price of $4.1451 per share. The number of shares of Common Stock to be issued upon such conversion shall be equal to the quotient obtained by dividing the outstanding principal amount of such Note, together with all accrued and unpaid interest thereon, by $4.1451.
Alternatively, if a holder does not elect to convert its Note pursuant to this Section 3.1(b), such holder may demand repayment in full of the entire outstanding principal amount of its Note, together with all accrued and unpaid interest thereon, on the Maturity Date. Any such repayment shall be made in accordance with Section 3.3. For the avoidance of doubt, the election by a holder to convert or demand repayment is a holder-by-holder determination, and the election of one holder shall not bind or affect the election of any other holder.
(c) Conversion or Repayment Upon Change of Control.  Upon the occurrence of a Change of Control at any time prior to the earlier of (x) a Qualified Financing and (y) the Maturity Date, the Company shall deliver written notice to each holder of the Notes at least fifteen (15) Business Days prior to the anticipated consummation of such Change of Control (or, if fifteen (15) Business Days' prior notice is not practicable, as promptly as practicable following the Company's becoming aware of the anticipated Change of Control). Upon receipt of such notice, each holder may elect, by delivery of written notice to the Company at least five (5) Business Days prior to the consummation of such Change of Control, either:
(i) to convert all (but not less than all) of the outstanding principal amount of its Note, together with all accrued and unpaid interest thereon, into shares of Common Stock at the Valuation Cap Price of $4.1451 per share; or
(ii) to receive repayment of an amount equal to one and one-half times (1.5x) the outstanding principal amount of such holder's Note, plus all accrued and unpaid interest thereon (such amount, the "Change of Control Premium"). The Change of Control Premium shall be payable in cash in immediately available funds concurrently with or promptly following the consummation of the Change of Control.
If a holder fails to deliver a timely election notice, such holder shall be deemed to have elected repayment of the Change of Control Premium. The Company shall cause any successor, surviving, or acquiring entity in a Change of Control transaction to assume the obligations of the Company under the Notes and this Agreement, or to pay the Change of Control Premium to each holder electing repayment, concurrently with the consummation of such Change of Control.
(d) Mechanics of Conversion.  The following procedures shall apply to any conversion of the Notes pursuant to this Section 3.1:
(i) Notice. In the case of an automatic conversion upon a Qualified Financing, the Company shall deliver written notice to each holder at least ten (10) Business Days prior to the anticipated closing of such Qualified Financing (or as promptly as practicable), setting forth (A) the anticipated date of the closing of the Qualified Financing, (B) the per-share price to be paid by the new investors, (C) the applicable Conversion Price, and (D) the number of Conversion Shares to be issued to such holder. In the case of a voluntary conversion under Section 3.1(b) or an election to convert under Section 3.1(c), the holder shall deliver written notice to the Company specifying its election to convert.
(ii) Delivery of Conversion Shares. The Company shall deliver to each converting holder the Conversion Shares issuable upon conversion of such holder's Note within ten (10) Business Days following (A) the closing of the Qualified Financing (in the case of an automatic conversion), (B) the Maturity Date (in the case of a voluntary conversion), or (C) the consummation of the Change of Control (in the case of a conversion under Section 3.1(c)), as applicable. The Conversion Shares shall be delivered in book-entry form through the Company's transfer agent or, if requested by the holder, by delivery of one or more stock certificates.
(iii) Fractional Shares. No fractional shares of capital stock shall be issued upon conversion of any Note. In lieu of any fractional share to which a holder would otherwise be entitled, the Company shall pay to such holder an amount in cash (rounded to the nearest whole cent) equal to the product of (A) the fractional share interest to which such holder would otherwise be entitled, multiplied by (B) the applicable Conversion Price.
(iv) Cancellation of Notes. Upon the conversion in full of a Note, such Note shall be deemed cancelled and of no further force or effect, and the holder shall promptly surrender the original Note (or an affidavit of loss in form reasonably acceptable to the Company, together with an indemnity agreement, if the original Note has been lost, stolen, or destroyed) to the Company for cancellation.
(v) Anti-Dilution Protection. The Conversion Shares issued upon conversion of the Notes shall be entitled to standard broad-based weighted-average anti-dilution protection applicable to the series of Preferred Stock into which the Notes convert, on terms consistent with the certificate of designation or other organizational documents governing such series. Such anti-dilution protection shall provide for adjustments to the applicable conversion price in the event of dilutive issuances of equity securities by the Company at a price per share less than the then-applicable conversion price, subject to customary carve-outs for issuances pursuant to the Equity Incentive Plan, issuances in connection with strategic transactions approved by the Board, and other customary exclusions.
Section 3.2 — Interest
Each Note shall bear simple interest on the outstanding principal amount thereof at a rate of six percent (6.0%) per annum, computed on the basis of a three-hundred-sixty-five (365)-day year and the actual number of days elapsed. Interest shall accrue from and including the Closing Date.
Interest on the Notes shall not be payable in cash during the term of the Notes. Instead, all accrued and unpaid interest shall be payable in kind ("PIK") by capitalizing (i.e., adding to and becoming part of) the outstanding principal amount of the applicable Note on each anniversary of the Closing Date. Upon such capitalization, the capitalized interest shall be treated as principal for all purposes of this Agreement and the Notes, including for purposes of calculating future interest accruals. For the avoidance of doubt, interest shall be simple (and shall not compound on a daily basis) between PIK capitalization dates, and interest shall accrue only on the outstanding principal amount of a Note (including previously capitalized interest that has become principal).
The PIK schedule based on the aggregate principal amount of the Notes is as follows:
No cash interest payments shall be required or permitted during the term of the Notes. All interest shall be capitalized as set forth above and shall be payable (whether in cash upon repayment or in Conversion Shares upon conversion) only upon the conversion, maturity, or acceleration of the Notes.
Section 3.3 — Maturity; Repayment
Unless earlier converted pursuant to Section 3.1 hereof or accelerated pursuant to Section 3.6 hereof, all outstanding principal (including all capitalized PIK interest that has been added to principal) and all accrued and unpaid interest on each Note shall be due and payable in full on the Maturity Date (April 12, 2027). Payment of all amounts due on the Maturity Date shall be made by wire transfer of immediately available funds in United States dollars to accounts designated in writing by the respective holders not fewer than five (5) Business Days prior to the Maturity Date. The Company shall deliver to each holder a payoff statement setting forth the total amount due to such holder at least ten (10) Business Days prior to the Maturity Date.
Section 3.4 — Senior Unsecured Obligations
The Notes shall constitute senior unsecured obligations of the Company. The Notes shall rank senior in right of payment to all existing and future subordinated indebtedness of the Company and shall rank pari passu in right of payment with all other existing and future senior unsecured indebtedness of the Company. The Notes are not secured by any assets, property, or collateral of the Company and no holder shall have any lien, security interest, or other encumbrance on any assets of the Company by virtue of holding a Note. Nothing in this Section 3.4 shall restrict the ability of the Company to incur additional indebtedness, subject to the limitations set forth in Section 7.2(a) hereof.
Section 3.5 — Prepayment
The Company may not prepay any Note, in whole or in part, without the prior written consent of the Majority Holders. Any permitted prepayment shall be made ratably among all holders of the Notes in proportion to their respective outstanding principal amounts (including capitalized PIK interest) and shall include all accrued and unpaid interest through the date of prepayment.
Section 3.6 — Events of Default
(a) Events of Default. Each of the following shall constitute an "Event of Default" under this Agreement and the Notes:
(i) Payment Default. The Company shall fail to pay any principal amount or interest on any Note when due and payable (whether at maturity, upon acceleration, or otherwise), and such failure shall continue unremedied for a period of five (5) Business Days after the date on which such payment was due.
(ii) Breach of Representations, Warranties, or Covenants. The Company shall breach in any material respect any representation, warranty, or covenant contained in this Agreement or any other Transaction Document, and (A) if such breach is of a representation or warranty, such representation or warranty was inaccurate in any material respect as of the date made, or (B) if such breach is of a covenant, such breach shall continue unremedied for a period of thirty (30) days after written notice thereof from the Majority Holders to the Company; provided that no cure period shall apply if such breach is not capable of being cured.
(iii) Voluntary Bankruptcy. The Company shall (A) commence a voluntary case or proceeding under any applicable federal, state, or foreign bankruptcy, insolvency, reorganization, or similar law, (B) consent to the entry of an order for relief against it in an involuntary case or proceeding under any such law, (C) consent to the appointment of a receiver, trustee, custodian, assignee for the benefit of creditors, or similar official of the Company or of any substantial part of its property, (D) make a general assignment for the benefit of its creditors, or (E) admit in writing its inability to pay its debts as they become due.
(iv) Involuntary Bankruptcy. An involuntary case or proceeding shall be commenced against the Company under any applicable federal, state, or foreign bankruptcy, insolvency, reorganization, or similar law, or a decree or order for relief shall be entered against the Company by a court of competent jurisdiction, or a receiver, trustee, custodian, or similar official shall be appointed for the Company or any substantial part of its property, and such case, proceeding, decree, order, or appointment shall continue undismissed and unstayed for a period of sixty (60) consecutive days.
(v) Judgment Default. A final, non-appealable judgment or order for the payment of money in excess of One Million Dollars ($1,000,000) (exclusive of amounts covered by insurance for which the insurer has acknowledged coverage) shall be rendered against the Company by a court of competent jurisdiction, and such judgment or order shall remain unsatisfied, unvacated, unbonded, or unstayed for a period of sixty (60) consecutive days after the date on which the right to appeal therefrom has expired.
(vi) Dissolution. The Company shall take any corporate action to authorize, or any Governmental Authority shall issue any order, decree, or ruling directing, the dissolution, winding up, or liquidation of the Company.
(b) Acceleration. Upon the occurrence and during the continuance of any Event of Default described in clauses (i), (ii), (v), or (vi) of Section 3.6(a), the Majority Holders may, by written notice to the Company, declare all outstanding principal (including capitalized PIK interest) and accrued and unpaid interest on all Notes to be immediately due and payable, whereupon the same shall become immediately due and payable, without presentment, demand, protest, or further notice of any kind, all of which are hereby expressly waived by the Company. Upon the occurrence of any Event of Default described in clause (iii) or (iv) of Section 3.6(a), all outstanding principal and accrued and unpaid interest on all Notes shall automatically become immediately due and payable, without any declaration or other act on the part of any holder, and without presentment, demand, protest, or further notice of any kind.
(c) Default Interest. Upon the occurrence and during the continuance of an Event of Default, interest on the outstanding principal amount of each Note shall accrue at a rate of eight percent (8.0%) per annum (representing an increase of two percent (2.0%) from the standard rate of six percent (6.0%)), from the date of such Event of Default until such Event of Default is cured or waived by the Majority Holders in accordance with Section 8.2 hereof.
(d) Remedies Cumulative. The rights and remedies of the holders of the Notes upon an Event of Default are cumulative and are not exclusive of any other rights or remedies available at law or in equity.
Section 3.7 — Transfer Restrictions
(a) No Note may be transferred, assigned, pledged, hypothecated, or otherwise disposed of by any holder without the prior written consent of the Company (which consent shall not be unreasonably withheld, conditioned, or delayed); provided that any holder may transfer its Note to an Affiliate of such holder without the Company's consent, so long as such transferee Affiliate agrees in writing to be bound by the terms and conditions of this Agreement and the Notes.
(b) All transfers of Notes shall be subject to compliance with all applicable federal and state securities laws, including the Securities Act. Any transferee of a Note shall be required to deliver to the Company (i) an opinion of counsel reasonably satisfactory to the Company, or (ii) such other evidence as may be reasonably requested by the Company, in each case to the effect that such transfer is exempt from, or not subject to, the registration requirements of the Securities Act.
(c) Each Note shall bear a restrictive legend in substantially the following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS."
ARTICLE 4 — REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each Purchaser, as of the date hereof and as of the Closing Date (except where a particular representation or warranty expressly speaks as of a specific date, in which case such representation or warranty is made as of such date), subject in each case to the exceptions, qualifications, and disclosures set forth in the Disclosure Schedules (each of which exceptions, qualifications, and disclosures shall be deemed to qualify and modify the representations and warranties to which they expressly relate and such other representations and warranties to which the applicability of such exception, qualification, or disclosure is reasonably apparent on its face), as follows:
Section 4.1 — Organization and Good Standing
The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. The Company was incorporated on March 14, 2017, and its file number with the Secretary of State of the State of Delaware is 6347821. The Company's registered agent in the State of Delaware is Capitol Registered Agents, Inc., located at 1209 Orange Street, Suite 200, Wilmington, Delaware 19801. The Company is duly qualified to transact business as a foreign corporation and is in good standing in each jurisdiction where the nature of its business or the ownership, leasing, or operation of its properties requires such qualification, including the State of California (foreign qualification filed with the California Secretary of State on April 3, 2017; California entity number C4085629). The Company has all requisite corporate power and authority to own, lease, and operate its properties and assets and to carry on its business as currently conducted and as proposed to be conducted. A true and complete copy of the Company's Restated Certificate of Incorporation, as currently in effect, and the Company's Bylaws, as currently in effect, have been made available to the Purchasers. The Company's federal employer identification number is 82-3194507. The Company does not have any subsidiaries and does not own, directly or indirectly, any equity interest in any other Person.
Section 4.2 — Authorization
The execution, delivery, and performance of each Transaction Document by the Company, and the issuance and sale of the Notes hereunder, have been duly authorized by all necessary corporate action on the part of the Company, including the approval of the Board of Directors by written consent dated April 5, 2024, and no further approval, authorization, or consent by the Company's stockholders or any other Person is required for the Company to execute, deliver, and perform its obligations under the Transaction Documents or to issue the Notes. The Company has obtained all consents, approvals, and waivers required under its Restated Certificate of Incorporation, Bylaws, and any stockholder agreements, investor rights agreements, voting agreements, or similar agreements to which the Company is a party in connection with the execution, delivery, and performance of the Transaction Documents and the issuance of the Notes.
Section 4.3 — Enforceability
This Agreement has been, and each other Transaction Document will be at or prior to the Closing, duly executed and delivered by the Company. Each Transaction Document constitutes, or upon execution and delivery will constitute, the valid and binding obligation of the Company, enforceable against the Company in accordance with its respective terms, subject in each case to the Enforceability Exceptions.
Section 4.4 — No Conflicts
The execution, delivery, and performance by the Company of the Transaction Documents, the issuance of the Notes, and the consummation of the transactions contemplated hereby and thereby do not and will not:
(a) violate, conflict with, or result in a breach of any provision of the Company's Restated Certificate of Incorporation or Bylaws, each as currently in effect;
(b) violate, conflict with, or result in a breach of, or constitute a default (or an event that, with notice, lapse of time, or both, would constitute a default) under, any applicable law, rule, regulation, order, judgment, injunction, decree, or governmental permit or license binding on the Company or any of its assets or properties;
(c) result in a breach of, constitute a default (or an event that, with notice, lapse of time, or both, would constitute a default) under, or give rise to a right of termination, cancellation, modification, or acceleration of any obligation or loss of any benefit under, any material contract, agreement, lease, license, instrument, or other arrangement to which the Company is a party or by which the Company or any of its assets or properties is bound; or
(d) result in the creation or imposition of any lien, encumbrance, claim, security interest, or charge upon any of the Company's assets or properties.
No consent, approval, order, license, permit, action by, or authorization of, or declaration, filing, or registration with, any Governmental Authority or other Person is required in connection with the execution, delivery, and performance by the Company of the Transaction Documents, the issuance of the Notes, or the consummation of the transactions contemplated hereby, other than (i) the filing of a Form D with the Securities and Exchange Commission, (ii) applicable blue sky filings, and (iii) such other filings or notifications as may be required under applicable securities laws.
Section 4.5 — Capitalization
(a) As of immediately prior to the Closing, the authorized capital stock of the Company consists of (i) 100,000,000 shares of Common Stock, par value $0.0001 per share, of which 12,400,000 shares are issued and outstanding, and (ii) 50,000,000 shares of Preferred Stock, par value $0.0001 per share, of which 6,850,000 shares of Series A Preferred Stock, 11,500,000 shares of Series B Preferred Stock, and 14,000,000 shares of Series C Preferred Stock are issued and outstanding. In addition, there are outstanding options to purchase an aggregate of 3,500,000 shares of Common Stock under the Company's 2018 Equity Incentive Plan, with a weighted average exercise price of $1.87 per share. The total Fully Diluted Capitalization as of immediately prior to the Closing is 48,250,000 shares.
(b) All outstanding shares of Common Stock and Preferred Stock have been duly authorized, validly issued, fully paid, and nonassessable, and were issued in compliance with all applicable federal and state securities laws and not in violation of any preemptive rights, rights of first refusal, or similar rights. The Conversion Shares, when issued in accordance with the terms of this Agreement and the Notes, will be duly authorized, validly issued, fully paid, and nonassessable.
(c) Except as set forth in Section 4.5 of the Disclosure Schedules, there are no outstanding options, warrants, rights (including conversion or preemptive rights, rights of first refusal, or similar rights), or agreements for the purchase or acquisition from the Company of any shares of its capital stock or any securities convertible into or exercisable or exchangeable for shares of its capital stock, other than options outstanding under the 2018 Equity Incentive Plan as described in Section 4.5(a) above.
(d) The Company's most recent independent valuation of the Common Stock for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, was completed on January 15, 2024, and established the fair market value of the Common Stock at $4.15 per share.
(e) The capitalization table set forth in the Disclosure Schedules accurately reflects the fully diluted capitalization of the Company as of immediately prior to the Closing, including all outstanding shares, options, warrants, and other convertible or exercisable securities.
Section 4.6 — Financial Statements
The Company has delivered to the Purchasers:
(a) the Company's audited financial statements for the fiscal year ended December 31, 2023 (consisting of a balance sheet, statement of operations, statement of changes in stockholders' equity (deficit), and statement of cash flows, together with the notes thereto), which were audited by Baxter & Calloway, CPAs, the Company's independent registered public accounting firm (engagement partner: Nadia Sorensen, CPA) (the "Audited Financial Statements"); and
(b) the Company's unaudited interim financial statements (consisting of a balance sheet and statement of operations) for the most recently available interim period (the "Interim Financial Statements" and, together with the Audited Financial Statements, the "Financial Statements").
As of December 31, 2023, the Company's financial position was as follows: total assets of $74,100,000; cash and cash equivalents of $51,300,000; total liabilities of $18,700,000; and a net loss for the fiscal year ended December 31, 2023, of ($62,400,000). The Company has no revenue.
The Financial Statements have been prepared in accordance with GAAP, consistently applied throughout the periods covered thereby, and present fairly in all material respects the financial condition, results of operations, changes in stockholders' equity, and cash flows of the Company as of the dates and for the periods indicated therein, subject, in the case of the Interim Financial Statements, to normal year-end audit adjustments (none of which are expected to be material) and the absence of footnote disclosures.
Section 4.7 — Absence of Changes
Since December 31, 2023, the Company has conducted its business only in the ordinary course of business consistent with past practice, and there has been no event, change, circumstance, development, condition, or effect that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Without limiting the generality of the foregoing, since December 31, 2023, the Company has not (a) declared, set aside, or paid any dividend or distribution on any of its capital stock, (b) redeemed or repurchased any shares of its capital stock, (c) incurred any indebtedness for borrowed money in excess of $500,000, (d) made any material change in its accounting methods, principles, or practices, (e) sold, transferred, leased, or otherwise disposed of any material assets outside the ordinary course of business, or (f) entered into any material contract or agreement not in the ordinary course of business. As of the date hereof, the Company's monthly cash burn rate is approximately $5,800,000 (approximately $69,600,000 annualized), and the Company's remaining cash runway is approximately eighteen (18) months, inclusive of the proceeds of the offering contemplated by this Agreement.
Section 4.8 — Litigation
Except as set forth in Section 4.8 of the Disclosure Schedules, there is no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or arbitration pending or, to the Company's knowledge, threatened in writing against the Company or any of its officers or directors (in their capacities as such) before any court, arbitrator, or Governmental Authority that (a) would reasonably be expected to have a Material Adverse Effect, (b) seeks to restrain, enjoin, or prevent the consummation of, or otherwise challenge, the transactions contemplated by this Agreement, or (c) involves a claim for damages in excess of $500,000. To the Company's knowledge, there are no facts or circumstances that would reasonably be expected to give rise to any such action, suit, proceeding, or claim.
Section 4.9 — Compliance with Laws
The Company has complied, and is currently in compliance, in all material respects with all applicable laws, rules, regulations, ordinances, orders, judgments, decrees, permits, licenses, and governmental requirements applicable to the conduct of its business and the ownership and use of its assets and properties. Without limiting the generality of the foregoing, the Company is in material compliance with all applicable requirements of the United States Food and Drug Administration ("FDA"), including all applicable regulations, guidance documents, and requirements set forth in Title 21 of the Code of Federal Regulations, and all other Governmental Authorities with jurisdiction over the Company's clinical and preclinical programs. The Company has not received any written notice from any Governmental Authority alleging any material violation of applicable law. The Company holds all permits, licenses, and authorizations necessary for the lawful conduct of its business as currently conducted.
Section 4.10 — Intellectual Property
The Company owns, or has valid and enforceable rights to use pursuant to licenses, sublicenses, or other agreements, all patents, patent applications, trademarks, trademark registrations and applications, trade names, service marks, copyrights, copyright registrations and applications, trade secrets, know-how, inventions, proprietary data, and other intellectual property rights (collectively, "intellectual Property") that are necessary for or used in the conduct of the Company's business as currently conducted and as proposed to be conducted, free and clear of all liens and encumbrances (other than Permitted Liens). Except as set forth in Section 4.10 of the Disclosure Schedules, (a) the Company has not received any written notice of any claim that the Company is infringing, misappropriating, or otherwise violating the intellectual Property of any third party, (b) to the Company's knowledge, no third party is infringing, misappropriating, or otherwise violating any intellectual Property owned by the Company, and (c) the Company has taken commercially reasonable measures to protect the confidentiality of its trade secrets and other proprietary information.
Section 4.11 — Material Contracts
All material contracts, agreements, instruments, and arrangements to which the Company is a party or by which the Company or any of its assets or properties is bound (each, a "Material Contract") are listed in Section 4.11 of the Disclosure Schedules. True, correct, and complete copies of each Material Contract (including all amendments and modifications thereto) have been made available to the Purchasers. Each Material Contract is valid, binding, and in full force and effect, and is enforceable by and against the Company in accordance with its terms, subject to the Enforceability Exceptions. Neither the Company nor, to the Company's knowledge, any other party thereto, is in material breach or default under any Material Contract, and no event has occurred that, with the giving of notice, the passage of time, or both, would constitute a material breach or default under any Material Contract or give rise to a right of termination, cancellation, or acceleration thereunder.
Section 4.12 — Tax Matters
The Company has timely filed (taking into account any extensions duly obtained) all federal, state, local, and foreign tax returns required to be filed by it, and all such tax returns are true, correct, and complete in all material respects. The Company has paid all taxes (whether or not shown on such returns) that are due and payable, and has withheld and remitted to the appropriate taxing authorities all amounts required to have been withheld and remitted. There are no pending or, to the Company's knowledge, threatened tax audits, assessments, deficiencies, or other claims with respect to the Company's taxes. The Company has not received any written notice of assessment or proposed assessment by any taxing authority in connection with any tax return. The Company has not waived or extended any statute of limitations with respect to taxes. The Company is not a party to any tax-sharing, tax indemnification, or similar agreement (other than any such agreement entered into in the ordinary course of business, the primary purpose of which is not tax-related).
Section 4.13 — Employee Matters
The Company is, and at all times has been, in material compliance with all applicable laws, rules, and regulations relating to employment and labor, including all laws relating to wages, hours, overtime, discrimination, harassment, retaliation, workplace health and safety, workers' compensation, immigration, collective bargaining, employee benefits, and the classification of workers as employees or independent contractors. Except as set forth in Section 4.13 of the Disclosure Schedules, (a) the Company is not a party to or bound by any collective bargaining agreement, (b) no labor union or works council has been recognized or certified as a bargaining representative for any employees of the Company, (c) there are no pending or, to the Company's knowledge, threatened labor disputes, grievances, unfair labor practice charges, or similar proceedings involving the Company, and (d) the Company has not experienced any work stoppage, slowdown, or lockout.
Section 4.14 — Insurance
The Company maintains insurance policies with reputable insurance carriers in amounts and covering risks that are customary and appropriate for companies of similar size and stage in the biopharmaceutical industry, including directors and officers liability insurance, commercial general liability insurance, product liability insurance, property insurance, and workers' compensation insurance. All such insurance policies are in full force and effect, all premiums due thereon have been paid, and the Company has not received any notice of cancellation, non-renewal, or material amendment with respect to any such policy. The Company has not made any claim under any such insurance policy that is currently pending or remains outstanding.
Section 4.15 — Regulatory Matters
(a) The Company's lead clinical asset, GDT-4187, is a selective CDK9/FLT3 dual kinase inhibitor currently being evaluated in a Phase 2b clinical trial (n=280 patients) for the second-line treatment of refractory non-small cell lung cancer. The Phase 2b clinical trial is being conducted at twenty-two (22) clinical centers across eight (8) states in the United States. The Company has obtained all necessary approvals, authorizations, and clearances from the FDA and applicable institutional review boards to conduct such clinical trial, and the clinical trial is being conducted in accordance with the Company's approved protocol and all applicable laws, regulations, and requirements.
(b) GDT-5201, the Company's next-generation PROTAC degrader, is in preclinical development. The Company is conducting preclinical studies for GDT-5201 in accordance with all applicable regulations, including good laboratory practice (GLP) regulations where applicable.
(c) The Company is in material compliance with all applicable regulatory requirements, including FDA regulations, good clinical practice (GCP) guidelines, good laboratory practice (GLP) regulations, good manufacturing practice (GMP) requirements, and all other applicable requirements of Governmental Authorities with jurisdiction over the Company's clinical and preclinical programs.
(d) Except as set forth in Section 4.15 of the Disclosure Schedules, the Company has not received any FDA Form 483 observations, warning letters, untitled letters, clinical holds, or other correspondence from the FDA or any other Governmental Authority alleging any material deficiency or violation in connection with the Company's clinical or preclinical programs.
Section 4.16 — No General Solicitation
Neither the Company nor any Person acting on behalf of the Company has offered or sold the Notes by any form of general solicitation or general advertising (as such terms are used in Regulation D under the Securities Act), including any advertisement, article, notice, or other communication published in any newspaper, magazine, website, or similar medium, or broadcast over television, radio, or the internet, or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. The Notes are being offered and sold only to the Purchasers, each of whom is an existing stockholder of the Company and has a pre-existing substantive relationship with the Company.
Section 4.17 — Private Placement
Assuming the accuracy of the representations and warranties of the Purchasers set forth in Article 5 hereof, the offer, sale, and issuance of the Notes as contemplated by this Agreement

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